Pitney Bowes Inc. (NYSE:PBI) Q2 2023 Earnings Call Transcript

Marc Lautenbach: No, we would absolutely consider – and this is true across the board. I mean, I’ve always said, we certainly put the portfolio together in a way that, they can share structures and get efficiencies and economies of scale and all those things. At the same time, we maintain optionality. So, if a business and you saw it with border free – so border free is kind of the proof in the pudding that was a business that we chose to exit. And I would say the rest of the cross-border business, we have that same degree of optionality.

Anthony Lebiedzinksi: Got it. Okay. And then I know, you mentioned that the revenue per piece will be down in the third quarter, is that something? Is that dynamic, is something that you would expect in the fourth quarter as well? Or do you think that at some point, you could start to see a reversal of that, or maybe just kind of flattening, given the new client wins and or so far, and maybe potential new client wins – that you have in the pipeline?

Marc Lautenbach: I would say, revenue per piece, quarter-to-quarter is a touch of a question for me right now. Obviously, so much of that depends on client dynamics, what clients are hitting the ball, what consumers are buying, et cetera. So – a little bit of I guess year-to-year I do expect that it will likely be down. Because some of the new clients, but again, if you look at RPP, revenue per piece decline in the second quarter, transportation cost, declined the same amount. So, it’s easy to over rotate on one particular variable, you really got to look at the contribution margin. We look at a client basis. So looking at one variable without kind of looking at the attendant, cost could reach you to the wrong conclusion.

Anthony Lebiedzinksi: Got it. Right. Well, thanks. I’ll pass it on to the next caller. And best of luck.

Marc Lautenbach: Thank you.

Operator: And next we can go to Kartik Mehta with Northcoast Research. Please go ahead.

Kartik Mehta: Good morning, Marc. I know we’ve had a lot of conversation about the cross-border business. And I’m wondering, do you think this is a secular issue for you? Is it temporary? So, right now, I know it’s a drag, and I’m wondering if there’s a way to reposition the business to make it profitable or is it just you need volume? And maybe it’s a temporary issue?

Marc Lautenbach: Yes, look I think that’s to be determined in all candor, it is a business, it’s highly concentrated and to customers, as customer relationships as I said of evolved. Those dynamics, we don’t expect to change the issue around exchange rates to stabilize to touch, so that’s a little bit less of a problem. So, I think it’s a question mark of how that cross-border business evolves going forward. But again, I think it’s easy to kind of over rotate in cross-border, I would draw your attention back to the domestic parcel business. I mean, that’s where the biggest chunk of the revenue is, if you look at the long-term plan, that’s where all the incremental EBIT is and – to your questions, the cross-border things work itself out one way or the other. We’ll get that business, moving forward or if not, I’m confident that it’s got some back in the marketplace.