Vistaprint Q2 Revenue Up 6 Percent

Vistaprint N.V. announced financial results for the three month period ended Dec. 31, 2013, the second quarter of its 2014 fiscal year.

“Our second quarter financial results reflect strong year-over-year earnings growth as anticipated,” said Robert Keane, president and CEO “Revenue results continue to be consistent with our range of expectations, albeit at the low end of that range. Our holiday performance was solid across all major geographies, especially in light of continued improvements we are making to the customer experience, which are meant to drive long-term value and loyalty, but have dampened near-term revenue growth. This is reflected in a year-over-year reduction in order volume offset by strong growth in value per order.”

“We are pleased with our execution of our strategic initiatives including customer value proposition and manufacturing improvements, and are patient regarding the resulting near-term revenue headwinds,” Keane continued. “We are confident we are making positive changes to our business that support our ability to drive customer loyalty and lifetime value, and that lay foundations in new areas such as geographic expansion and customers with more sophisticated marketing needs. Even as we continue to invest in these strategic initiatives we have been able to deliver significant earnings growth and margin expansion as past investments have begun to bear fruit and we have gained efficiencies in advertising and leverage in other operating expenses. For instance, in Europe we saw an important shift in our customer base toward higher order values and improved per customer profitability. While this change has suppressed our near-term revenue, we believe it creates a solid basis for future profitable growth.”

Revenue for the second quarter of fiscal year 2014 grew to $370.8 million, a 6% increase over revenue of $348.3 million reported in the same quarter a year ago. Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the second quarter was 67.4%, up from 67.2% in the same quarter a year ago. Operating income in the second quarter was $52.5 million, or 14.2% of revenue, and reflected a 59% increase compared to operating income of $33.0 million, or 9.5% of revenue, in the same quarter a year ago.

“Now that we have completed our second quarter, we are updating our full-year guidance to reflect our current outlook,” Ernst Teunissen, executive vice president and chief financial officer, said. “As anticipated and described at our Investor Day last August, we continue to make changes in our business to improve our customer value proposition and our European marketing execution, which we expect will continue to positively impact profitability while resulting in lower top-line growth in fiscal year 2014. In the first half of our fiscal year, we delivered revenue growth at the lower end of our expectation range across geographies, and we expect this to continue in the back half of the year. Therefore, we are lowering and narrowing our revenue guidance range around the original low end of the range. We have executed very well on our fiscal year-to-date profitability targets, and we continue to remain confident in our ability to drive meaningful growth in our profit margins and earnings per share this fiscal year. We have raised and narrowed our EPS guidance as a result.”

For the full fiscal year ending June 30, 2014, the company expects revenue of approximately $1,235 million to $1,265 million, or 6% to 8% growth year over year in reported terms and on a constant-currency basis.