But beyond that, I think there’s two very important trends, which we have spoken about in the past, which is important to keep in mind, which are constraining near-term revenue, but which are good for Cimpress’ upload and print our revenue outlook over the longer term. We are the undisputed European leader in selling direct to end customers through upload and print style, e-commerce printing, these are small orders traditionally relative to the commercial printing industry. And the industry continues to shift overall print, not just online towards smaller orders and we see that as playing to Cimpress’ strength. And as those orders get smaller, it gets harder and harder for traditional printers to play in that. Secondly, we do see we have headwinds from resellers.
Resellers are typically professional graphic, our graphic design professionals or local printers or the like who have traditionally been how and even today are how the majority of the Print industry transacts businesses. And especially in print group, but across our blood and print, we have a pretty material business selling to those resellers who in turn say to the end customer. But with the passage of time, those resellers are kind of systematically getting this intermediated and in large part by Cimpress’ upload and print group as a leader in this space. So there’s a channel shift there. But if you step back, that excluding that high concentration of reseller revenue, it is an overall positive picture. And we look to upload and print and the teams there is being, they are very innovative.
They’re very focused on being low cost producers. They have incredible supply chains and production capabilities, they serve customers incredibly well. And you can see in cohort value, especially defined as cash flow not revenues, you see these strong trends occurring. So they’re going to keep doing what they’re doing. There’s a lot of good things happening there and we don’t see this as a sign that the multiyear strength we’ve had in upload and print is anywhere near the end.
Meredith Burns: Great. Thank you, Robert. I’m going to shift to Sean for a technical question. So Sean, what accounted for the big share based compensation jump in the second quarter and is that an appropriate run rate?
Sean Quinn: Sure. Yes. Always good to have a couple of technical questions in here. The grants that we made this year were a combination of instruments, performance share units or PSUs and also RSUs. In terms of why the increase in share-based compensation expense, the total grant value for all of our annual grants we do is a little bit higher than last year, but there’s really two things that drove the, the higher expense in Q2. The first one is that for the PSUs and in terms of Robert, myself, other executive officers have all of our long-term incentives and PSUs. So, it’s a large part of the overall share based compensation for this year. The way that those are required to be accounted for is on an accelerated basis. And so what ends up happening to spare you the details is that about 50% of the expense gets taken in year one.
And that compares to like if there’s an RSU with a four-year vesting period, about 25% of the expense we get taken in year one. So, you do get just in terms of how it’s accounted for higher cost in year one than our pass profile. The second one is that the PSUs and the expense that we take for PSUs is variable depending on our attainment against the performance conditions. Those performance conditions are based on our revenue, EBITDA and our number of cash flow for this year. And we’ve updated those estimates of attainment percentages based on our results, which we’re strong and so that attainment percentage is a bit higher. And so that also played a role. You’ll see in our non-GAAP reconciliations, we actually walked this and so we increased our full-year expectation for share based compensation expense from $60 million to $65 million for FY24.
Again, just remember that some of that is driven by this feature of accelerated expensing for the PSUs with 50% of that cost in year one. As to, I think the question also asked that that’s a good reflection of the run rate. I think it really depends on sort of the intermediate use. [Technical Difficulty], I think that’s a fair run rate. We’re continuing with PSUs year long on an accelerated basis, so that’ll kind of more and more be layered into the expense profile.
Meredith Burns: Great. Thanks so much, Sean. Okay. This next question is for Robert. Robert, can you update us on customer experience enhancements in Vista that are driving improvements customer satisfaction, new customer acquisition cohorts, and customer lifetime value?
Robert Keane: Sure. Let me tell you first of all, the main point about these customer experience improvements is that we are increasing the cadence and the velocity of continuous improvements of many small things, not relying on step function changes, and that’s very powerful. But there are too many to cover all of these. I will give you some very specific examples, but there’s a lot of them. Sean also covered this to some extent in his response to the consumer question earlier, and I’ll come to that. Now you mentioned specifically acquisition cohorts and customer lifetime value and customer satisfaction. I think that in terms of cohorts, we have, there’s two major factors. How much value is there per customer, the LTV, and how many customers?
