Shipping and mailing solutions provider Pitney Bowes (NYSE: PBI) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 7.5% year on year to $477.6 million. The company’s full-year revenue guidance of $1.81 billion at the midpoint came in 2.2% below analysts’ estimates. Its non-GAAP profit of $0.45 per share was 17.6% above analysts’ consensus estimates.

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Company Overview

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $1.89 billion in revenue over the past 12 months, Pitney Bowes is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Pitney Bowes’s demand was weak over the last five years. Its sales fell by 11.8% annually, a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Pitney Bowes’s recent performance shows its demand remained suppressed as its revenue has declined by 15.3% annually over the last two years.

This quarter, Pitney Bowes missed Wall Street’s estimates and reported a rather uninspiring 7.5% year-on-year revenue decline, generating $477.6 million of revenue.

Looking ahead, sell-side analysts expect revenue to decline by 2.2% over the next 12 months. While this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Pitney Bowes was profitable over the last five years but held back by its large cost base. Its average operating margin of 7% was weak for a business services business.

On the plus side, Pitney Bowes’s operating margin rose by 11.8 percentage points over the last five years.

This quarter, Pitney Bowes generated an operating margin profit margin of 8%, up 2.4 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Pitney Bowes’s EPS grew at an astounding 35.3% compounded annual growth rate over the last five years, higher than its 11.8% annualized revenue declines. This tells us management adapted its cost structure in response to a challenging demand environment.

Diving into Pitney Bowes’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Pitney Bowes’s operating margin expanded by 11.8 percentage points over the last five years. On top of that, its share count shrank by 10.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Pitney Bowes, its two-year annual EPS growth of 483% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Pitney Bowes reported adjusted EPS of $0.45, up from $0.32 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Pitney Bowes’s full-year EPS of $1.36 to grow 5.7%.

Key Takeaways from Pitney Bowes’s Q4 Results

It was good to see Pitney Bowes beat analysts’ EPS expectations this quarter. We were also glad its full-year EPS guidance outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 13.2% to $11.60 immediately following the results.

Big picture, is Pitney Bowes a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).