The revenue decline was driven by lower Customer Information Management and Location Intelligence license revenues but benefited by growth in Customer Engagement Software licenses. While the Company continues to make good progress in expanding the indirect channel and training partner sales and technical resources, it will take time before results reflect substantial revenue from partner-led deals. The Company continues to focus on improving direct sales efficiency to grow the license revenue pipeline. EBIT margin declined as a result of the lower licensing revenue.
Global Ecommerce
This quarter represents the first quarter of the Borderfree acquisition fully reported in both periods. Ecommerce marketplace and retail revenues grew 17 percent from prior year excluding the impacts of currency on strong growth in UK outbound. U.S. outbound marketplace grew despite a stronger U.S. dollar versus prior year, as well as some temporary disruption on demand for parcel shipments from the U.S. to Canada prior to the resolution of a Canada Post labor dispute. The revenue growth was partially offset by a decline in domestic office shipping.
EBIT margin increased versus the prior year due to synergy savings and revenue growth. The Company remains on-track to achieve its cross border synergy run-rate objective from the acquisition of Borderfree. This was partially offset by a decline in higher- margin domestic office shipping.
2016 Guidance
This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release and as more fully outlined in the Company's 2015 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.
This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. Revenue guidance is provided on a constant currency basis because the Company cannot reasonably predict the impact future changes in currency exchange rates will have on revenue. Additionally, the Company cannot provide GAAP EPS and GAAP cash from operations guidance due to the uncertainty of future potential restructurings, goodwill and asset write-downs, unusual tax settlements or payments and contributions to its pension funds, acquisitions, divestitures and other potential adjustments, which could (individually or in the aggregate) have a material impact on the Company’s performance. The Company’s guidance is based on an assumption that the global economy and foreign exchange markets in 2016 will not change significantly.
The Company expects improving trends in the business in the fourth quarter as a result of actions taken to achieve its long term strategic initiatives. These initiatives include the initial benefits of the implementation of the enterprise business platform, new product introductions and continued enhancement of the channel strategy, which will benefit the fourth quarter, with increasing contribution into 2017.
For 2016, the Company expects to be at the low-end of its annual guidance range for revenue and adjusted earnings per share. The Company’s guidance for the full year 2016:
- Revenue, on a constant currency basis, to be in the range of a 1 percent decline to 3 percent decline when compared to 2015.
- Adjusted EPS to be in the range of $1.75 to $1.82. Adjusted EPS guidance excludes the year-to-date charge of $0.22 per share primarily related to restructuring and asset impairments.
- Free cash flow to be in the range of $400 million to $450 million.
The Company is hosting its annual Analyst Day on December 6th in New York City. At that time, the Company will provide an update on its strategy.
Conference Call and Webcast
Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pb.com.
About Pitney Bowes
Pitney Bowes (NYSE: PBI), is a global technology company powering billions of transactions – physical and digital – in the connected and borderless world of commerce. Clients around the world, including 90 percent of the Fortune 500, rely on products, solutions and services from Pitney Bowes in the areas of customer information management, location intelligence, customer engagement, shipping, mailing, and global ecommerce. And with the innovative Pitney Bowes Commerce Cloud, clients can access the broad range of Pitney Bowes solutions, analytics, and APIs to drive commerce. For additional information visit Pitney Bowes, the Craftsmen of Commerce, at www.pitneybowes.com.
Use of Non-GAAP Measures
