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_______________________________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________________________________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
 
Commission file number: 000-26427
Stamps.com Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 77-0454966
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
1990 E. Grand Avenue
El Segundo, California 90245
(Address of Principal Executive Offices and Zip Code)

(310) 482-5800
(Registrant's Telephone Number, Including Area Code)
________________________________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per share
STMPNASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ  No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b‑2 of the Exchange Act. (Check one):

Large accelerated filer  þ                         Accelerated filer  o    
Non-accelerated filer  o                         Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No þ

As of July 31, 2021, there were 18,426,475 shares of the Registrant's Common Stock outstanding.



STAMPS.COM INC. AND SUBSIDIARIES
FORM 10-Q QUARTERLY REPORT FOR THE QUARTER ENDED JUNE 30, 2021

TABLE OF CONTENTS
   Page
 
 ITEM 1.
   
 ITEM 2.
   
 ITEM 3.
   
 ITEM 4.
   
 
 ITEM 1.
   
 ITEM1A.
   
 ITEM 2.
   
 ITEM 3.
   
 ITEM 4.
   
 ITEM 5.
   
 ITEM 6.


Table of Contents
PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
  June 30, 2021December 31, 2020
Assets(Unaudited) 
Current assets:  
Cash and cash equivalents$551,961 $443,552 
Accounts receivable, net55,474 63,308 
Current income taxes17,483 8,035 
Prepaid expenses15,944 17,480 
Other current assets106,438 86,319 
Total current assets747,300 618,694 
Property and equipment, net40,292 32,887 
Goodwill390,342 388,753 
Intangible assets, net115,098 125,254 
Deferred income taxes, net26,374 26,378 
Lease right-of-use assets54,546 58,506 
Other assets20,735 46,827 
Total assets$1,394,687 $1,297,299 
Liabilities and Stockholders' Equity  
Current liabilities:  
Accounts payable and other current liabilities$324,401 $215,967 
Deferred revenue8,718 7,833 
Current portion of lease right-of-use liabilities4,839 6,285 
Total current liabilities337,958 230,085 
Deferred income taxes, net7,607 7,524 
Long-term portion of lease right-of-use liabilities56,042 53,986 
Other liabilities33,763 31,585 
Total liabilities435,370 323,180 
Commitments and contingencies (Note 2)
Stockholders' equity:  
Common stock, $0.001 par value per share; Authorized shares: 47,500 in 2021 and 2020; Issued shares: 35,001 in 2021 and 34,707 in 2020; Outstanding shares: 18,246 in 2021 and 18,306 in 2020
58 57 
Additional paid-in capital1,319,678 1,276,484 
Treasury stock, at cost, 16,755 shares in 2021 and 16,401 shares in 2020
(717,245)(648,132)
Retained earnings338,097 329,606 
Accumulated other comprehensive income (loss)18,729 16,104 
Total stockholders' equity959,317 974,119 
Total liabilities and stockholders' equity$1,394,687 $1,297,299 
 
The accompanying notes are an integral part of these consolidated financial statements.
1

Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Revenues:  
Service$181,817 $186,990 $360,837 $326,126 
Product4,781 6,827 10,294 12,783 
Insurance4,476 4,096 9,033 7,276 
Customized postage 8,817  11,891 
Total revenues191,074 206,730 380,164 358,076 
Cost of revenues (exclusive of amortization of intangible assets, which is included in general and administrative expense):  
Service41,187 37,465 82,562 73,992 
Product1,472 2,411 3,320 4,149 
Customized postage 7,885  10,000 
Total cost of revenues42,659 47,761 85,882 88,141 
Gross profit148,415 158,969 294,282 269,935 
Operating expenses:  
Sales and marketing46,094 41,884 89,960 78,888 
Research and development32,112 22,884 60,622 44,207 
General and administrative34,202 33,015 63,372 61,483 
Legal settlements, net70,000  70,000  
Total operating expenses182,408 97,783 283,954 184,578 
Income (loss) from operations(33,993)61,186 10,328 85,357 
Foreign currency exchange gain (loss), net122 (33)33 (171)
Interest expense(95)(456)(190)(923)
Interest income and other income (loss), net21 6 49 32 
Income (loss) before income taxes  (33,945)60,703 10,220 84,295 
Income tax (benefit) expense(8,192)8,977 1,729 16,075 
Net income (loss)$(25,753)$51,726 $8,491 $68,220 
Net income (loss) per share:  
Basic  $(1.41)$3.00 $0.46 $3.98 
Diluted$(1.41)$2.73 $0.43 $3.68 
Weighted average shares outstanding:  
Basic18,298 17,231 18,330 17,148 
Diluted18,298  118,927 19,549 18,558 

The accompanying notes are an integral part of these consolidated financial statements.
1 Common equivalent shares are excluded from the diluted loss per share as their effect is antidilutive.
2

Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Net income (loss)$(25,753)$51,726 $8,491 $68,220 
Other comprehensive income (loss), net of tax:  
Foreign currency translation adjustments(284)(338)2,625 (15,065)
Comprehensive income (loss)$(26,037)$51,388 $11,116 $53,155 
 
The accompanying notes are an integral part of these consolidated financial statements.
3

Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)

Six Months Ended June 30, 2021
Common StockAdditional Paid-in CapitalTreasury Stock at CostRetained EarningsAccumulated
Other Comprehensive Income (Loss)
Total
SharesAmount
Balance at December 31, 202018,306 $57 $1,276,484 $(648,132)$329,606 $16,104 $974,119 
Net income — — — — 34,244 — 34,244 
Other comprehensive income (loss)— — — — — 2,909 2,909 
Stock-based compensation expense — — 8,690 — — — 8,690 
Exercise of stock options 186 — 15,237 — — — 15,237 
Shares issued under the Employee Stock Purchase Plan13 — 2,454 — — — 2,454 
Stock repurchase(136)— — (27,031)— (27,031)
Balance at March 31, 202118,369 $57 $1,302,865 $(675,163)$363,850 $19,013 $1,010,622 
Net income (loss)— — — — (25,753)— (25,753)
Other comprehensive income (loss)— — — — — (284)(284)
Stock-based compensation expense— — 11,484 — — — 11,484 
Exercise of stock options95 1 5,329 — — — 5,330 
Stock repurchase, excluding stock repurchase from employees for tax withholdings(217)— — (41,975)— — (41,975)
Tax withholding stock repurchase(1)— — (107)— — (107)
Balance at June 30, 202118,246 $58 $1,319,678 $(717,245)$338,097 $18,729 $959,317 

Six Months Ended June 30, 2020
Common StockAdditional Paid-in CapitalTreasury Stock at CostRetained EarningsAccumulated
Other Comprehensive Income (Loss)
Total
SharesAmount
Balance at December 31, 201917,029 $56 $1,098,426 $(593,511)$150,941 $9,713 $665,625 
Net income — — — — 16,494 — 16,494 
Other comprehensive income (loss)— — — — — (14,727)(14,727)
Stock-based compensation expense — — 10,725 — — — 10,725 
Exercise of stock options 103 — 8,818 — — — 8,818 
Shares issued under the Employee Stock Purchase Plan50 — 1,950 — — — 1,950 
Stock repurchase(80)— — (8,577)— — (8,577)
Balance at March 31, 202017,102 $56 $1,119,919 $(602,088)$167,435 $(5,014)$680,308 
Net income— — — — 51,726 — 51,726 
Other comprehensive income (loss)— — — — — (338)(338)
Stock-based compensation expense— — 13,221 — — — 13,221 
Exercise of stock options368  29,750 — — — 29,750 
Stock repurchase(56)— — (9,397)— — (9,397)
Balance at June 30, 202017,414 $56 $1,162,890 $(611,485)$219,161 $(5,352)$765,270 


The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Six Months Ended
June 30,
 20212020
Operating activities:  
Net income $8,491 $68,220 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization12,887 13,140 
Stock-based compensation expense20,174 23,946 
Accretion of debt issuance costs191 342 
Changes in operating assets and liabilities, net of assets and liabilities acquired:  
Accounts receivable7,956 17,837 
Prepaid expenses1,566 3,900 
Other current assets(20,119)(12,791)
Current income taxes(9,442)69 
Lease right-of-use assets4,002 2,026 
Other assets25,901 (8,218)
Deferred revenue868 2,804 
Lease right-of-use liabilities570 (1,953)
Other liabilities2,231 1,787 
Accounts payable and other current liabilities109,747 12,895 
Net cash provided by operating activities165,023 124,004 
Investing activities:  
Acquisition of property and equipment(7,290)(2,347)
Net cash used in investing activities(7,290)(2,347)
Financing activities:  
Net proceeds from (repayments of) short-term financing obligations(3,088)26,001 
Debt issuance costs (762)
Principal payments on term loan (50,530)
Proceeds from exercise of stock options20,567 38,568 
Issuance of common stock under Employee Stock Purchase Plan2,454 1,950 
Repurchase of common stock(69,006)(17,974)
Payments related to tax withholding for share-based compensation(107) 
Net cash provided by (used in) financing activities(49,180)(2,747)
Effect of exchange rate changes(144)(164)
Net increase (decrease) in cash and cash equivalents108,409 118,746 
Cash and cash equivalents at beginning of period443,552 156,307 
Cash and cash equivalents at end of period$551,961 $275,053 
Supplemental information:  
Capital expenditures accrued but not paid at period end$2,269 $ 
Cash paid for amounts included in the measurement of lease liabilities included in cash provided by operating activities, net of tenant improvement reimbursements received$532 $2,671 
Lease liabilities arising from obtaining right-of-use assets$ $852 
 
The accompanying notes are an integral part of these consolidated financial statements.
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1.    Summary of Significant Accounting Policies

Basis of Presentation

We prepared the consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (US) generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading. We recommend that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in our latest annual report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 26, 2021.

In our opinion, these unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly our financial position as of June 30, 2021, our results of operations for the three and six months ended June 30, 2021, and our cash flows for the six months ended June 30, 2021. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021.

Basis of Consolidation

The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of Stamps.com Inc. and the entities in which we have 100% voting and/or economic control. References in this Report to "we" "us" "our" or "Company" are references to Stamps.com Inc. and its subsidiaries.
Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation.
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.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. There are significant estimates and judgments inherent in the preparation of the consolidated financial statements including those related to the fair value of intangible assets and goodwill and the allowance for credit losses.
The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the consolidated financial statements for the period ended June 30, 2021. As events continue to evolve and additional information becomes available, our assumptions and estimates may change materially in future periods.

Accounts Receivable

Our accounts receivable relate to mailing and shipping services, postage purchasing and invoicing, branded insurance provided to customers prior to billing, and other receivables.
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We maintain an allowance for credit losses for expected uncollectible accounts which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations.
We evaluate collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known collectability issues. The evaluation is based on a combination of factors. If we become aware of a customer’s inability to meet its financial obligations, an allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from the customer. Accounts receivable are written off against the allowance for uncollectible accounts when we determine amounts are no longer collectible. We recognize allowances for credit losses for all other customers based on either the age of the receivable or applying a loss rate method which incorporates historical experience and an evaluation of macroeconomic factors, including the estimated impact of COVID-19 on the collectability of our accounts receivable.
As additional information becomes available to us, our future assessment of our allowance for credit losses could materially and adversely impact our consolidated financial statements in future reporting periods.
There were no material write offs or recoveries against the allowance for uncollectible accounts during the six months ended June 30, 2021 or the six months ended June 30, 2020, respectively.
The allowance for credit losses on accounts receivable was approximately $8.1 million and $11.9 million as of June 30, 2021 and December 31, 2020, respectively.
Business Combinations

The acquisition method of accounting is used for business combinations. The results of operations of acquired businesses are included in our consolidated financial statements prospectively from the date of acquisition. The fair value of purchase consideration is allocated to the assets acquired and liabilities assumed from the acquired entity and is generally based on their fair value at the acquisition date. The excess of the fair value of purchase consideration over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Acquisition-related expenses are recognized in our consolidated financial statements as incurred.
Contingencies and Litigation

In the ordinary course of business, we are subject to various litigation matters as a claimant and a defendant. We record any amounts recovered in these matters when received. We establish loss provisions for claims against us when the loss is both probable and can be reasonably estimated. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such proceedings, we disclose the estimate of the amount of loss or possible range of loss, or disclose that an estimate of loss cannot be made, as applicable.
Deferred Revenue

Our deferred revenue relates mainly to service revenue, which generally arises due to the timing of payment versus the provision of services for certain customers billed in advance. Approximately $7.0 million of revenue recognized in the six months ended June 30, 2021 was included in the deferred revenue balance at December 31, 2020. Approximately $7.5 million of revenue recognized in the six months ended June 30, 2020 was included in the deferred revenue balance at December 31, 2019.

Fair Value of Financial Instruments

Carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to their short maturities. When drawn, the Company's outstanding debt held by third party financial institutions is carried at cost, adjusted for debt issuance costs. When drawn, the Company's debt is not publicly traded and the carrying amount typically approximates fair value for debt that accrues interest at a variable rate for companies with similar financial characteristics as the Company, which are considered Level 2 fair value inputs as defined in Note 7 - "Fair Value Measurements" in our consolidated financial statements.
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Foreign Currency Translation

The functional currency of the Company’s major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into US dollars are recorded in accumulated other comprehensive income as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in foreign currency exchange gain (loss), net. All assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period.
Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in business combinations. We are required to test goodwill for impairment annually and whenever events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is the operating segment or a business that is one level below that operating segment. Reporting units are aggregated as a single reporting unit if they have similar economic characteristics.
Goodwill is reviewed for impairment annually on October 1 utilizing either a qualitative or quantitative assessment. We have an option to make a qualitative assessment of a reporting unit's goodwill for impairment. If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary. When we perform a quantitative assessment, we compare the fair value of the reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference is recognized as an impairment loss. As of June 30, 2021, we are not aware of any indicators of impairment that would require an impairment analysis other than our annual goodwill impairment analysis. No instances of impairment to the Company's goodwill were identified during our October 1, 2020 review.
Indefinite-lived intangible assets are reviewed for impairment annually on October 1 and whenever events or circumstances indicate that the fair value of an indefinite-lived intangible asset may be below its carrying value. In assessing other intangible assets not subject to amortization for impairment, the Company also has the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then the Company is not required to perform any additional tests for assessing those intangible assets for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. As of June 30, 2021, we are not aware of any indicators of impairment that would require an impairment analysis other than our annual indefinite-lived intangible assets impairment analysis. The Company concluded that it was more likely than not the fair value of each of the Company's intangible assets not subject to amortization was in excess of its respective carrying value during our October 1, 2020 review.
Long-Lived Assets and Finite-Lived Intangible Assets
Long-lived assets including intangible assets with finite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful life of the asset, generally three to five years for furniture, fixtures, and equipment and ten to forty years for building and building improvements. Leasehold improvements are capitalized and amortized over the shorter of the useful life of the asset or the remaining term of the lease. We have a policy of capitalizing expenditures that materially increase assets' useful lives and charging ordinary maintenance and repairs to operations as
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incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed, and any gain or loss is included in income from operations.

Income Taxes

We are subject to income taxes in the US and foreign jurisdictions. We provide for income taxes at the current and future enacted tax rate and consistent with the laws applicable in each jurisdiction. We account for income taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic No. 740, Income Taxes (Income Taxes), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Income Taxes also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. We record a valuation allowance to reduce our gross deferred tax assets to the amount that is more likely than not (a likelihood of more than 50 percent) to be realized.  In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income. We evaluate the appropriateness of our deferred tax assets and related valuation allowance in accordance with Income Taxes based on all available positive and negative evidence.

Leases

We determine if an arrangement is a lease at inception. Right-of-use (ROU) assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. For this purpose, we consider only payments that are fixed and determinable at the time of commencement. As most of our leases do not provide an implicit rate, the interest rate used to determine the present value of future lease payments is an estimated incremental borrowing rate. Many of our leases include one or more options to renew. These options are factored into the determination of the lease term and lease payments when their exercise is considered to be reasonably certain.

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We elected the practical expedient to combine fixed payments for non-lease components with our lease payments and account for them together as a single lease component which increases the amount of the ROU assets and liabilities. This election also applies to subleases where the Company is the lessor.

We also elected to recognize the associated lease payments for leases with an initial term of 12 months or less in the consolidated statements of operations on a straight-line basis without recognizing a ROU asset or liability.

Operating leases are included in lease right-of-use assets, current portion of lease right-of-use liabilities, and long-term portion of lease right-of-use liabilities on our consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term in income from operations on our consolidated statements of operations.

Sublease operating income related to lease payments received where the Company is the lessor are classified as a reduction of operating expense in income from operations on our consolidated statements of operations.

Other Current Assets
Other current assets principally consist of prepayments for postage and shipping labels, inventory and, as of June 30, 2021, expected insurance recoveries. Prepayments for postage and shipping labels totaled $64.9 million at June 30, 2021 and $82.4 million at December 31, 2020, respectively. Expected insurance recoveries totaled $37.0 million at June 30, 2021. See Note 2 - "Commitments and Contingencies" for more information on expected insurance recoveries.
Other Liabilities
Other liabilities principally consist of long-term unrecognized income tax benefits, as well as indirect tax liabilities and other liabilities.
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Revenue Recognition

We recognize revenues when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Our payment terms vary by the products and services offered. The term between billings and when payment is due is not significant.
Revenues are presented on a disaggregated basis on the consolidated statements of operations.
Service revenue is recognized over time for each month that customers have access to our platform or at a point in time when assets are transferred to the customer. We earn service revenue from our mailing and shipping operations in several different ways: (1) customers may pay us a monthly fee, based on a subscription plan which may be waived or refunded for certain customers, for which we provide them access to our platform, in which case revenue is earned over the period of time that the customers have access to the platform which is typically month-to-month; (2) we may be compensated directly by our carriers for shipping labels printed that meet certain requirements, in which case revenue is earned over time, which is typically in the same month that the relevant labels are printed; (3) we may earn revenue from customers when they purchase postage, print shipping labels or perform other transactions using our solutions, in which case revenue is earned at the point in time we transfer an asset to the customer and have a present right of payment for the asset transferred; (4) we may earn revenue that may take the form of some or all of the spread between the rate a customer pays and the rate the carrier or integration partner receives, either charged directly or paid by our partners, in which case revenue is earned at a point in time, which is typically when the customer purchases postage or prints a shipping label; and (5) we may earn other types of revenue shares or other compensation from specific customers that have access to our platform or through integration partners, in which case revenue is recognized at a point in time, which is when we have fulfilled our performance obligations.
In the case of monthly fees based on subscription plans, the Company recognizes a reduction of revenue in the period for which a waiver is granted or when a refund is processed, which is typically the same period in which the associated subscription revenue is recognized or, in the case of refunds, could be a later period. Waivers and refunds were not material to the consolidated financial statements during the six months ended June 30, 2021 or June 30, 2020, respectively.
Customers may purchase delivery services from carriers through our mailing and shipping solutions. When funds are transferred directly from customers to the carrier, these funds are not recognized as revenue. We also provide mailing and shipping services for which the cost of postage or delivery is included in the cost of the service and, therefore, is recognized as service revenue.
Product revenue consists of products sold through the mailing and shipping supplies stores which are available to our customers from within some of our mailing and shipping solutions. Products sold include mailing labels, shipping labels, thermal printers, scales, and other mailing and shipping-focused office supplies. We recognize product revenue on product purchases upon shipment of orders to customers.
We provide our customers with the opportunity to purchase parcel insurance directly through our solutions. Insurance revenue represents the amount we receive from customers net of the costs paid to our insurance providers. We recognize insurance revenue on insurance purchases upon the ship date of the insured package, which is the point in time when we have fulfilled our performance obligations.
Customized postage revenue, which includes the face value of postage, from the sale of customized postage sheets and rolls is recognized upon transfer of control of the product to the customer, which occurs upon our delivery to the carrier. 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. As a result, we do not expect material customized postage revenue or cost of revenue after June 2020.
On a limited basis, we allow third parties to offer products and promotions to our customer base. These arrangements generally provide payment in the form of a flat fee or revenue sharing arrangements where we receive payment upon customers accessing third party products and services. Total revenue from such advertising arrangements was not significant during the six months ended June 30, 2021 or June 30, 2020, respectively.

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Segment Information

Our operations consist of two segments: Stamps.com and Metapack. Please see Note 9 - “Segment and Geographical Information” in our Notes to Consolidated Financial Statements for further description. 

Short-Term Financing Obligations

We utilize short-term financing, which is separate from our debt as described in Note 12 - "Debt," to fund certain Company operations. Short-term financing obligations are included in accounts payable and other current liabilities in the accompanying consolidated balance sheets. As of June 30, 2021, we had $12.0 million in short-term financing obligations and $58.0 million of unused credit. As of December 31, 2020, we had $15.1 million in short-term financing obligations and $57.0 million of unused credit.

Stock-Based Compensation

We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award. We account for forfeitures as they occur.
We use the Black-Scholes-Merton option valuation model to estimate the fair value of share-based payment awards on the date of grant, which requires us to use a number of estimates and subjective assumptions, including stock price volatility, expected term, and risk-free interest rates. In the case of options we grant, our assumption of expected volatility is based on the historical volatility of our stock price over the term equal to the expected life of the options. We base the risk-free interest rate on US Treasury zero-coupon issues with a remaining term equal to the expected life of the options assumed at the date of grant. The estimated expected life represents the weighted average period the stock options are expected to remain outstanding, determined based on an analysis of historical exercise behavior.
Trademarks, Trade Names, and Other Intangible Assets (excluding Goodwill)
Acquired trademarks, trade names, and other intangibles (excluding goodwill) include both amortizable and non-amortizable assets and are included in intangible assets, net in the accompanying consolidated balance sheets. Intangible assets are carried at cost less accumulated amortization. Cost associated with internally developed intangible assets is typically expensed as incurred as research and development costs. Amortization of amortizable intangible assets is calculated on a straight-line basis, which is consistent with the expected future cash flows.
Treasury Stock

During the six months ended June 30, 2021 and June 30, 2020, we repurchased approximately 354,000 shares and 136,000 shares for $69.0 million and $18.0 million, respectively.

Accounting Guidance Adopted in 2021

Income Taxes

In December 2019, the FASB issued ASU 2019-12, a standard which eliminates certain exceptions to the general principles of ASC Topic 740 Income Taxes. The guidance became effective for the Company on January 1, 2021. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements.

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Accounting Guidance Not Yet Adopted

Reference Rate Reform

In March 2020, the FASB issued 2020-04, optional accounting guidance for a limited period of time to ease the potential burden in accounting for reference rate reform. The new standard provides expedients and exceptions to existing accounting requirements for contract modifications and hedge accounting related to transitioning from discontinued reference rates, such as the London Interbank Offered Rate (LIBOR), to alternative reference rates, if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference interest rates on our Amended and Restated Credit Agreement, as described in Note 12 - "Debt", but do not expect a significant impact to our operating results, financial position or cash flows.


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2.    Commitments and Contingencies

Legal Proceedings

We are subject to various routine legal proceedings and claims incidental to our business, and we do not believe that these proceedings and claims would reasonably be expected to have a material adverse effect on our financial position, results of operations, or cash flows except as otherwise described below.

On February 28, 2019 and March 13, 2019, two putative class action complaints were filed against us in the United States District Court for the Central District of California, Western Division. One of the two putative class actions was dismissed without prejudice, and in the other case, styled as Karinski v. Stamps.com, Inc. et al, Case 2:19-cv-01828 (the “Securities Class Action”), the Court appointed a lead plaintiff and approved lead plaintiff’s selection of lead counsel. Lead plaintiff filed a consolidated complaint in August 2019, purportedly on behalf of all those who purchased, or otherwise acquired, Stamps.com common stock between May 3, 2017 and May 8, 2019 (the "Securities Class"), alleging violations of the Securities Exchange Act of 1934 based on public disclosures that were purportedly rendered misleading based on certain uses of reseller rates. We filed a motion to dismiss in October 2019, and our motion to dismiss was granted in part and denied in part in January 2020. The Court granted plaintiff's motion for class certification on November 9, 2020, and the Court of Appeals granted our request to appeal that order on March 10, 2021.

On May 28, 2021, the lead plaintiff in the Securities Class Action, the Company and each of the other defendants in the Securities Class Action (the "Securities Defendants") reached an agreement in principle to settle the Securities Class Action. Under the terms of the agreement in principle, the lead plaintiff, on behalf of the class, would release the Securities Defendants from all claims asserted or that could have been asserted in the Securities Class Action and dismiss such claims with prejudice, in exchange for payment of $100 million to or on behalf of the class by the Company (a portion of which is expected to be funded by insurance proceeds). The agreement in principle remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, notice to the proposed class, and approval by the United States District Court for the Central District of California. If these conditions are satisfied, the proposed settlement will resolve all claims in the Securities Class Action against the Company and each of the other Securities Defendants. In the event that we are unable to execute a final stipulation of settlement and obtain Court approval, we and all other Securities Defendants will continue to defend vigorously against the claims asserted in the Securities Class Action.

On May 16, 2019 and May 21, 2019, two purported shareholder derivative suits were filed in the United States District Court for the Central District of California, Western Division, alleging breaches of fiduciary duties by officers and/or directors, unjust enrichment, abuse of control, waste of corporate assets, and violations of the Securities Exchange Act of 1934, and seeking unspecified damages, attorneys' fees and costs. The two cases were consolidated as In re Stamps.com Stockholder Derivative Litigation, Case 2:19-cv-04272 and co-lead plaintiffs and co-lead counsel were appointed, and the case was subsequently transferred to the United States District Court for the District of Delaware. On February 3, 2021, the case was consolidated with Harvey v. Kenneth T. McBride, et al (described below).

On August 19, 2019, a purported shareholder derivative suit was filed against us in a case formerly titled City of Cambridge Retirement System v. Kenneth T. McBride, et al, Case No. 2019-0658-AGB (and now titled Macomb County Employees’ Retirement System v. Kenneth T. McBride, et al. Case No. 2019-0658), in the Delaware Court of Chancery (the "State Derivative Action"), alleging breaches of fiduciary duties by officers and/or directors, insider trading, waste of corporate assets, and unjust enrichment. We filed a motion to dismiss in October 2019, and our motion to dismiss was granted in part and denied in part in March 2021.

On October 3, 2019, a purported shareholder derivative suit was filed against us in a case titled Harvey v. Kenneth T. McBride, et al, Case No. 1:19-cv-01861-CFC, in the United States District Court for the District of Delaware, alleging breaches of fiduciary duties by officers and/or directors, unjust enrichment, waste of corporate assets, and violations of the Securities Exchange Act of 1934. The Court had entered a stipulation to stay the derivative case pending the outcome of the derivative lawsuit pending in the Delaware Court of Chancery. On February 3, 2021, the Court lifted the stay and consolidated the case with In re Stamps.com Stockholder Derivative Litigation (described above), and vacated a prior order appointing lead counsel. The cases are consolidated as In re Stamps.com Stockholder Derivative Litigation, Case No. 1:19-cv-01861-CFC (the "Federal Derivative Actions and, together with the State Derivative Action, the "Derivative Actions").

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On June 3, 2021, the plaintiffs in the Derivative Actions (the "Derivative Plaintiffs"), the Company and each of the defendants in the Derivative Actions (the "Derivative Defendants") executed a Term Sheet whereby they agreed to settle the claims in the Derivative Action pursuant to the Term Sheet. Among other things, the Term Sheet provides that Derivative Plaintiffs would release the Derivative Defendants from all claims asserted or that could have been asserted in the Derivative Actions, in exchange for: (i) payment of $30 million of insurance proceeds to the Company on behalf of certain of the Derivative Defendants from D&O insurance policies purchased by the Company for the benefit of its directors and officers and the Company; and (ii) the implementation of certain corporate governance changes by the Company.

On July 23, 2021, the Derivative Plaintiffs and Derivative Defendants executed and filed a Stipulation of Settlement with the Delaware Court of Chancery that contained settlement terms similar to those set forth in the Term Sheet. On July 27, 2021, the Delaware Court of Chancery entered a scheduling order concerning the State Derivative Action. The proposed settlement in the State Derivative Action also resolves the Federal Derivative Actions. The proposed settlement of the Derivative Actions remains subject to approval by the Delaware Court of Chancery. The approval hearing has been scheduled for September 30, 2021. In the event that we are unable to execute a final stipulation of settlement and obtain Court approval, the Derivative Defendants will continue to defend vigorously against the claims asserted in the Derivative Actions.

The Company and the other defendants have denied and continue to deny each and all of the claims alleged in the Securities Class Action and the Derivative Actions, and the proposed settlements contain no admission of liability, wrongdoing, or responsibility by any of the defendants.

The Company had not accrued any material amounts related to any of the Company’s legal proceedings as of December 31, 2020. The Company has recorded an estimated $70 million of net expense from legal settlements based on currently available information related to expected insurance recoveries and legal costs, and assuming the settlements are finalized and obtain final approval from the respective Courts for the Securities Class Action and Derivative Actions described above. The estimated range of total reasonably possible net loss from legal settlements and related expenses is approximately $66 million to $77 million.

On July 29, 2021 a complaint was filed against us in the United States District Court for the Central District of California, Western Division, styled as Alger II Dynamic Opportunities Fund - Weatherbie Capital, et al v. Stamps.com, Inc. et al, Case No. 2:21-cv-06108, by several plaintiffs seeking unspecified damages, attorneys' fees and costs, and alleging violations of the Securities Exchange Act of 1934 and certain state law claims based on public disclosures that were purportedly rendered misleading based on certain uses of reseller rates. We believe that the case is without merit and intend to defend it vigorously. Due to the recent filing date of the case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.

Although management at present believes that the ultimate outcome of the various proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations, cash flows, or overall trends, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or other events could occur. An unfavorable outcome for an amount in excess of management's present expectations may result in a material adverse impact on our business, results of operations, financial position, and overall trends.

Commitments

Our significant contractual obligations and commercial commitments (other than debt commitments, which are summarized in Note 12 - "Debt") consist of operating lease obligations as of June 30, 2021. Please see Note 10 - “Leases” for additional information.

 
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3.    Net Income (Loss) per Share

The following table reconciles share amounts utilized to calculate basic and diluted net income (loss) per share (in thousands, except per share data):
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Net income (loss) $(25,753)$51,726 $8,491 $68,220 
Basic - weighted average common shares18,298 17,231 18,330 17,148 
Dilutive effect of common stock equivalents  21,696 1,219 1,410 
Diluted - weighted average common shares18,298 18,927 19,549 18,558 
Earnings (loss) per share:
Basic$(1.41)$3.00 $0.46 $3.98 
Diluted$(1.41)$2.73 $0.43 $3.68 
 
The calculation of dilutive shares excludes the effect of the following options that are considered antidilutive (in thousands):
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Antidilutive stock options2,741 678 494 1,103 
2 Common equivalent shares are excluded from the diluted loss per share as their effect is antidilutive.
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4.    Stock-Based Compensation

The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands):
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Stock-based compensation expense relating to:  
Stock options$10,967 $12,830 $19,103 $23,072 
Employee stock purchases517 391 1,071 874 
Total stock-based compensation expense$11,484 $13,221 $20,174 $23,946 
Stock-based compensation expense relating to:  
Cost of revenues$919 $925 $1,840 $1,844 
Sales and marketing2,236 2,362 4,398 4,669 
Research and development2,810 2,947 5,800 5,825 
General and administrative5,519 6,987 8,136 11,608 
Total stock-based compensation expense$11,484 $13,221 $20,174 $23,946 

The following are the weighted average assumptions used in the Black-Scholes-Merton option valuation model for stock options granted in the periods indicated:
 
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Expected dividend yield % % % %
Risk-free interest rate0.4 %0.2 %0.3 %0.7 %
Expected volatility89.7 %87.5 %89.6 %85.0 %
Expected life (in years)3.33.33.33.3


5.    Goodwill and Intangible Assets

The following table summarizes goodwill as of December 31, 2020 and June 30, 2021 (in thousands):
 Stamps.com SegmentMetapack SegmentTotal
Goodwill balance at December 31, 2020$241,984 $146,769 $388,753 
Foreign currency translation 1,589 1,589 
Goodwill balance at June 30, 2021$241,984 $148,358 $390,342 

Beginning October 1, 2020, the Stamps.com segment includes operations in Atlanta, Georgia that were previously reported as part of the Metapack segment. All prior periods have been updated to conform to current year presentation of goodwill by segment.

We have amortizable and non-amortizable intangible assets consisting of trademarks, trade names, developed technology, non-compete agreements, customer relationships, and other. The gross carrying amount of amortizable and non-amortizable intangible assets was $233.4 million at June 30, 2021 and $232.3 million at December 31, 2020. Non-amortizable assets of $11.4 million as of both June 30, 2021 and December 31, 2020 consist primarily of the trade name relating to the Endicia acquisition.

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The following table summarizes our amortizable intangible assets as of June 30, 2021 (in thousands, except years):
 Gross
Carrying
 Amount
Accumulated
 Amortization
Net Carrying
Amount
Remaining weighted average amortization period (years)
Patents and others$8,195 $8,195 $ 0.0
Customer relationships113,931 66,287 47,644 6.9
Technology83,867 37,269 46,598 8.7
Non-compete2,211 2,211  0.0
Trademarks and trade names13,807 4,340 9,467 8.0
Total amortizable intangible assets at June 30, 2021$222,011 $118,302 $103,709 7.7

The following table summarizes our amortizable intangible assets as of December 31, 2020 (in thousands, except years):
 Gross
Carrying
 Amount
Accumulated
 Amortization
Net Carrying
Amount
Remaining weighted average amortization period (years)
Patents and others$8,195 $8,195 $ 0.0
Customer relationships113,398 59,762 53,636 7.0
Technology83,427 33,248 50,179 8.5
Non-compete2,211 2,104 107 0.5
Trademarks and trade names13,689 3,746 9,943 8.4
Total amortizable intangible assets at December 31, 2020$220,920 $107,055 $113,865 7.7
 
We recorded amortization of intangible assets totaling approximately $5.5 million and $11.1 million for the three and six months ended June 30, 2021, respectively. We recorded amortization of intangible assets totaling approximately $5.5 million and $11.0 million and for the three and six months ended June 30, 2020, respectively. Amortization of intangible assets is included in general and administrative expense in the accompanying consolidated statements of operations.

Our estimated amortization expense for the next five years and thereafter is as follows (in thousands):
Twelve Month Period Ending June 30,Estimated
Amortization
Expense
2022$14,898 
202310,082 
202410,082 
20258,228 
20267,019 
Thereafter53,400 
Total$103,709 


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6.    Income Taxes

Our income tax benefit was $8.2 million for the three months ended June 30, 2021. Our income tax expense was $1.7 million for the six months ended June 30, 2021. Our income tax expense was $9.0 million and $16.1 million for the three and six months ended June 30, 2020, respectively. Income taxes expected at the US federal statutory income tax rate of 21 percent differ from the reported income tax benefit and expense primarily as a result of permanent tax adjustments for non-deductible expenses, state taxes, tax benefits from research and development tax credits, exercises of stock awards, and the discrete benefit attributable to the legal settlements.

As of June 30, 2021 and December 31, 2020, we have recorded a valuation allowance of $2.8 million and $2.5 million, respectively, against certain state research and development credits for which we believe it is more likely than not that these deferred tax assets will not be realized.



7.    Fair Value Measurements

Financial assets measured at fair value on a recurring basis are classified in one of the three categories described below:

Level 1 - Valuations based on unadjusted quoted prices for identical assets in an active market

Level 2 - Valuations based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets
 
Level 3 - Valuations based on inputs that are unobservable and involve management judgment and our own assumptions about market participants and pricing

The following tables summarize our financial assets measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands):
 
  Fair Value Measurement at Reporting Date Using
 
 
 
 
Description
June 30, 2021Quoted Prices in
Active Markets
 for Identical
 Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
 Inputs
(Level 3)
Cash and cash equivalents$551,961 $551,961 $ $ 
Total$551,961 $551,961 $ $ 

  Fair Value Measurement at Reporting Date Using
 
 
 
 
Description
December 31, 2020Quoted Prices in
 Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
 Inputs
(Level 2)
Significant
Unobservable
 Inputs
(Level 3)
Cash and cash equivalents$443,552 $443,552 $ $ 
Total$443,552 $443,552 $ $ 
 

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8.    Cash and Cash Equivalents

Our cash equivalents consisted of money market funds at June 30, 2021 and December 31, 2020. We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. At June 30, 2021 and December 31, 2020, we had no material investments.

The following tables summarize our cash and cash equivalents as of June 30, 2021 and December 31, 2020 (in thousands):
 
 June 30, 2021
   Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
 
Estimated
Fair Value
Cash and cash equivalents:
Cash$545,127 $ $ $545,127 
Money market6,834   6,834 
Cash and cash equivalents$551,961 $ $ $551,961 
 
 December 31, 2020
   Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash and cash equivalents:    
Cash$436,720 $ $ $436,720 
Money market6,832   6,832 
Cash and cash equivalents$443,552 $ $ $443,552 



9.    Segment Information and Geographic Data

Segment Information

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company's Chairman and Chief Executive Officer has been identified as the CODM as defined by guidance regarding segment disclosures.
The Company’s reportable segments have been determined based on the distinct nature of their operations and customer bases, and the financial information that is evaluated regularly by the CODM.
The Stamps.com segment derives revenue from external customers from offering mailing and multi-carrier shipping labels online and shipping software solutions to consumers, small businesses, e-commerce shippers, enterprise mailers, and high volume shippers. The Stamps.com reportable 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.
Beginning October 1, 2020, the Stamps.com segment includes operations in Atlanta, Georgia that were previously reported as part of the Metapack segment. Prior period segment revenues and income (loss) from operations have not been restated as the impact was not material.
The Metapack segment consists of the operations of Metapack which derives revenues from external customers from offering multi-carrier enterprise-level shipping software solutions to large e-commerce retailers and brands. Metapack's customers are primarily located in Europe.
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Revenues, cost of revenues, and operating expenses are generally directly attributed to our segments. Inter-segment revenues are not presented separately, as these amounts are immaterial. Our CODM does not evaluate operating segments using asset information, and therefore total segment assets are not presented.
The following table presents our segment information and includes a reconciliation of income from operations to income before income taxes (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Segment revenues
Stamps.com$175,618 $191,047 $348,228 $328,592 
Metapack15,456 15,683 31,936 29,484 
Total revenues$191,074 $206,730 $380,164 $358,076 
Segment income (loss) from operations
Stamps.com$(31,390)62,901 $13,092 91,128 
Metapack(2,603)(1,715)(2,764)(5,771)
Total income from operations$(33,993)$61,186 $