Matthew Swope: Specifically looking at Global Ecommerce, you saw a major decline in EBITDA there in 2023. We had started 2023, hoping that GEC EBITDA might be positive. Is there any chance that again, especially what you’re saying about margins, it feels like maybe no, but is there any chance that Global Ecommerce could be EBITDA positive in 2024?
Ana Maria Chadwick: Yeah, so let me let me start that and Jason feel free to add. Listen, it’s absolutely our intent and our goal, and we are continuing to get closer and closer to that milestone. It’s very hard to call when it will happen. As you know, there’s a lot of market variables and the pricing pressure and the market dynamics that we’re in, it’s just really hard to call.
Jason Dies: Yeah, Matt, let me let me just jump in. I mean, look I’m going to say a couple of additional points here. We’re not going to comment specifically on where we think TEC is going to wind up as we go through 2024. I’ve said in the past, we’re not happy with the rate of performance that we’ve gotten now from a financial point of view, I think we’ve made tremendous progress from an operational and executional point of view. But we are still looking at ways to make sure that we can maximize the value of the business and I outlined a few of those earlier. The one thing in addition, I would say is, look, we are smart enough to know that we’re not necessarily always going to have all the answers. We have brought in a third party to help us look at and work with the management team on are we looking at all the levers we should be looking at are there ways to accelerate the actions that we’ve got in place?
And I’d say, just as a broader statement, bringing in a third party reflects certainly my personal philosophy that we should be open to ideas from the outside. I think you’ve seen that for me in talking to investors and analysts over the past four months. And GEC is not the only place, frankly, we’re going to bring in an outside pair of eyes. As you look at opportunities for us to think differently, potentially about our debt stack, about how we optimize the bank, we’re always going to be out looking for good ideas, and GEC is certainly one place we’re doing that.
Matthew Swope: And so this change of moving the GEC Shipping business into SendTech, is that part of that thinking? How will that work? Is there anything you can say about the profitability of GEC’s shipping? That piece on its own, is that EBITDA positive, or give us any more color on why you’re doing that, and what that will mean financially?
Jason Dies: Yes, let me first from a strategic point of view — and I think I said at the opening, but it’s important, and I want to reiterate it. As you think about going forward for Pitney Bowes, getting leverage from the assets and the offerings that we have across the portfolio is one of the opportunities that we still have in front of us. So moving the digital solutions business, from GEC to SendTech, was one of those things that just made obvious sense. If you think about the technology, the team and the capabilities that powers that business, they do it for both GEC and for SendTech. It is a business that is focused on the digital side of shipping transactions, of actually producing the labels. So it is more of a SaaS-based business.
And so bringing those together in the technology part of our organization, which is SendTech made sense for a bunch of reasons. One, it allows us to really bring the development and go to market teams together in a very focused way. It allows us to leverage the go-to-market of SendTech, as they shift more and more to shipping. And the synergies that we think we’re going to get there are going to pay off I think over the long term, as you look at the range of offerings that we will continue to create in that space.
Ana Maria Chadwick: Yes, and maybe let me add a few additional sizing of the opportunity here. So to put it in perspective, the shift on revenue, and we will provide a lot more color next quarter, but it’s around 3% of Global Ecommerce total revenue. So it gives you an idea of that. In terms of the gross margin that that brings, as Jason mentioned, this is very SaaS like, and that has a very healthy gross margin. Now in terms of the expense base to support that gross margin, we look to have leverage, as we are more focused around our engineering and our product development. So hopefully that gives you a perspective on dimensionalizing the size.
Jason Dies: I’m actually very excited about the move Matt, and for no other reason, then it refocuses the team on making sure that we are looking at our offerings. We’re looking at the technologies that we have in our portfolio. Are we monetizing them correctly? Do we have additional opportunities? And it just made all the sense in the world to bring these digital assets together under the SendTech umbrella where I think they can be best leveraged.
Matthew Swope: Thank you guys for that color. Ana, sorry to be myopic, on the finance part of it. Would that digital solutions business that moves over, was the piece that will move EBITDA positive in 2023?
Ana Maria Chadwick: So just to understand your question is as relates to Global Ecommerce, the shift as I mentioned, it’s 3% of the revenue. So yes, it carried, as I mentioned healthy, gross margin, but also as we optimize the expense, we believe we can do that better jointly. So in terms of the relative size on the impact of the Global Ecommerce business, I wouldn’t say it’s anything significant.
