Ladies and gentlemen, welcome to the Vistaprint Third Quarter Fiscal Year 2013 Q&A Earnings Conference Call. My name is Patrick, and I'll be your operator for today. This call is being hosted by Robert Keane, President and CEO; and Ernst Teunissen, Executive Vice President and CFO. Before we take the first call, as noted in the Safe Harbor statement at the beginning of the earnings presentation, comments may include forward-looking statements, including statements regarding revenue and earnings guidance, and actual results may differ materially. Risk that could impact those statements are described in the documents that are periodically filed with the Securities and Exchange Commission. Now we'll proceed with the first call.

And gentlemen, your first call comes from the line of Youssef Squali with Cantor Fitzgerald. Youssef H. Squali - Cantor Fitzgerald & Co., Research Division: 2 questions, please, maybe starting with Ernst. Just a clarification, can you just please expand on your EPS and guidance for the June quarter and why do you expect it to be -- or to come in at a lower EPS in Q4 than in Q3? And then just broadly speaking, I know you're not guiding to 2014 just yet, but as you look at the business historically, you've talked about 20% growth. Is there any reason why at least we shouldn't see some sustainability in growth in 2014 over 2013, or is that still off the table?

So we have increased our guidance for EPS for the full year, as you can see, by $0.10 and that was really on the back of very good performance in the third quarter. We saw some favorability on margins. We saw some advertising favorability. We have good gross margins. And you're correct, if you look at the fourth quarter, you see that there is, on a GAAP basis, the parts have arranged [ph] actually indicate potential loss and that is because we have some expenses in the fourth quarter. The timing is not always perfect quarter-to-quarter that we can see. There are some nonrecurring expenses that are going to happen in the fourth quarter, and there's some operational expenses that we see happening in the fourth quarter as well. Youssef H. Squali - Cantor Fitzgerald & Co., Research Division: Can you expand on that just a little bit on those expenses, just the nature of them?

Some of -- there are some balance sheet related charges, and some are some projects that we're doing that we -- and some research that we're doing that we incur expenses for in the fourth quarter.

The other thing, Youssef, to note is that our revenue at the midpoint of the Q4 revenue guidance range is $17 million lower than our revenue in Q3. Youssef H. Squali - Cantor Fitzgerald & Co., Research Division: Okay. And then on the revenue, the 2014 question?

So on 2014, I want to stay away from giving guidance for '14. We'll do that obviously 3 months from now. We have just started to see some signs of stabilization in Europe in execution. Well, we have said that turnaround would be a longer-term effort, and we continue to believe that. In APAC, our growth is slow. That's partly self-inflicted because we've made some significant changes to our pricing and marketing and merchandising approach. In North America, we're executing well. We have seen growth in the mid to high teens, and we haven't [ph] seen yet the strong retention improvements that we would like to see long term, but we've been fairly consistent in our North America performance to date, and we'll say more in 3 months where we see that go in '14.

Your next question comes from the line of Brian Fitzgerald with Jefferies. Brian Patrick Fitzgerald - Jefferies & Company, Inc., Research Division: A couple of quick questions. As you've kind of taken your foot off the gas in terms of more aggressive marketing to attract a higher-valued customer in North America, what do you think the right level of repeat rate you would feel comfortable with? And then secondly, in Europe, can you segment that a bit for us? Is there a country or countries over there where your marketing strategy is generating the higher AOVs as you'd like to see?

Just to be sure, your first question, we are not taking our foot off the gas in terms of investment that are meeting our hurdle rates. We have pulled back on advertising a bit where we found that we were spending in programs that were not where we wanted them to be. But the North American business continues to be very strong, and we see it coming in where we hope it to be -- we hoped that it would be when we looked at the business 12 and 24 months ago. Clearly, in Europe, we are having these challenges we've spoken about for quite some time now. We really see Europe as requiring us to step back and build proper -- a really proper foundation of systems and processes and organization, and we are making a lot of progress on that. In terms of advertising that's targeted at a high value or lower-value customers, we don't really target our advertising that way, so to speak. There are certain channels who will, in a targeted word, search that might have very high-value customers, but we have not done anything to strategy to change what we've done in the past there. We manage all our advertising on a cash flow return or an LTV basis relative to the cohort that we're acquiring.

Your next question comes from the line of Jason Helfstein with Oppenheimer.

This is Jet [ph] on for Jason. Just -- I want to touch on the repeat. Your retention rate was down sequentially, and is there any reason behind that? Do you think you're going to have to step up marketing spend to improve that? And then another question, can you just highlight the changes you've made in the APAC region?

So definitely, year-over-year repeat order growth has slowed sequentially, but revenue from repeat orders definitely grew as our average order value for those increased. Now both of those metrics obviously are multiplied by each other to give us our overall revenue, and we do not expect to return and we're quite committed not to return to more aggressive advertising or heavier discounted offers in advertising that was traditional in our past, which is very effective at driving near-term repeat, especially for new customers. We feel very much that the types of customer value proposition improvements we're making are important, and among many others, is a whole segment of those improvements which relate to pricing transparency and clarity and the offer discount levels being reduced. So we don't see pushing up that repeat through advertising and marketing. Going to your question on Australia, it's actually related to that same philosophy. We took the opportunity in the last 3 to 5 months to really take a step function forward in terms of how we price in Australia, the clarity and transparency of that, we repriced a thousand different price points or more. In doing so, we brought the prices down, but we also reduced the level of discounting, so that what is shown on the site is much closer to what the customer is paying. We reduced cross-selling and upselling in email frequencies and there are a lot of different changes that are being done, first and foremost, to drive customer value and customer satisfaction. We continue to see Net Promoter Scores going up across the business, and the rapid deceleration we saw in Australia in the last -- and New Zealand in the last 3 and even 6 months has come from, as Ernst said, the self-inflicted, so to speak, or a choice full of decisions. We believe that, that's going to take what is a very healthy, highly penetrated business that still a lot of growth in front of it and position that market for very steady growth with the recognition that there's 21 million people in Australia and there's a certain limit.

And I want to build on that. The first question on the retentions. You may be looking at the Slide 14 that we put out earlier which is -- shows implied retention from going 42% to 41% sequentially from Q2 to Q3. There is that impact of our Retail business that changes some of these metrics. If you'd looked at this number, excluding the Retail business, our retention rate did not go down.

[Operator Instructions] Your next question comes from the line of Carter Malloy with Stephens.

So first is looking over the longer term and your previously stated goals, and taking into account the earlier question of revenue. Maybe now you're looking for '14, but just given the deceleration organic growth down to 11% this quarter, is it at least -- is it safe to say that the -- are you guys still confident that double-digit growth will be maintained as you slim back over the next few years in terms of the cost structure?

That's certainly our aspiration, but I really don't want to get even close to guiding to next year. We will -- I think what is most important is we, over the last year, 1.5 years, have made a choice and we're very committed to staying the course in that choice to, first and foremost, drive the customer value and then in the belief that, that's going to come back through the growth rates. And then we clearly are doing some things that we have ceased to do some things, that if we return to doing them could drive near-term revenue. But as to what exactly next year's growth and the mid to long-term growth is, we're currently in the middle of our FY '14 and longer-term planning. We're looking at a lot of different investment options that would have impact to our longer-term growth. We do believe we'll stay a growth company for some time to come, or hopefully a long time to come. But other than that, I want to avoid getting into specifics.

Okay. And do you guys plan on giving some updated 2016 metrics or that sort of $5 outlook type of speak either on this upcoming call or at the Analyst Day?

Certainly, at 3 months from now and even more so, the week following the Analyst Day, we'll give a perspective on our longer-term outlook. We have said in tonight's press release and in the documents that we still feel very comfortable that we're going to see margin expansion -- a material margin expansion in the near term, i.e., FY '14. Other than that, we have not commented on profits or revenues beyond our previous statements of 3 and 6 months ago.

Okay. And then lastly, again, just thinking out of the longer term, at what point or is there a point where you would go back and say, "You know what? We've tried investing more in the customer and doing less annoying upfront marketing and it's just not working. We're a good ways into it and the retention rates and the growth continue to take down despite the investments." So is there a break planned in your mind or some metric that you track that, at some point, you call it quits and say, "Okay. We'll go back to the old way of doing things because it really worked well."?

Let me parse the old way of doing things and say there are some -- I think actually there are 2 very distinct areas that come to mind and maybe others that Ernst wants to highlight, and I would say neither of them will we go back to the old way of doing things. The first one was driving deep discount, free everything, cross-sell, upsell aggressivity, which was clearly the right thing to draw our [indiscernible] at that time. But we see such strong results in our Net Promoter Score. We have such a conviction that the long-term health of the business and competitiveness and competitive advantage of the business is already materially ahead of where we are when we started this, that the enterprise value of this business is much greater having done this and we would not turn around on that. Secondly, in terms of advertising spend prior to July 2011, we would regulate our advertising spend as a percentage of revenues. What we're now doing, and we've made a conscious shift, was to shift to a DCF ROI-based, we say we spend x to acquire a customer or an average customer in a given cohort and we cash flow out the highly predictable cash flows that come from that cohort, and we have a hurdle rate which is -- the minimum is 15%, and if we're not hitting our -- that hurdle, we don't want to invest. Now what that does mean is we are investing beyond the horizon that we would've in past years, but we will not change off of that model because we just think it's a fundamentally sound economic model. Over time, we do believe that will pull down our advertising as a percentage of revenues because as those early cohorts become repeat customers the relative weight of new to the repeat business comes down and our advertising as a -- expressed as a percentage of revenues will come down, so we won't change the methodology that we've moved to in terms of using DCF as the methodology for analysis.

Your next question comes from the line of Mitch Bartlett with Craig-Hallum.

Robert, I wonder if you could just kind of review the digital businesses. I saw you had an estimate where you provided 356,000, I believe, digital subscribers but with an ARPU rising. But maybe you could just kind of break it down, say where strong, where you see opportunity and maybe include Webs, the integration of Webs and where that might go, whether Webs is expanded internationally as well?

Sure. So let me start with our traditional Vistaprint technology and brand, and it is basically flat. It's rounding -- or they're both between 357,000 last quarter and 356,000. To your point, we've grown our revenues through average spend or ARPU. We -- one of the major reasons that we have slowed down our growth is we have -- if you were able to take a time capsule back 12 or 18 months, we were very aggressive in our spending of -- our cross-selling of the website in the checkout process, and that aggressive cross-selling brought in a huge number of customers who were buying almost on impulse. As we've cleaned up our cart and given much more ability for customers to go straight to the payment and directly to the cart, that has impacted our signups. So what we are seeing is continued growth in people who are organically coming to us and buying from us and the people who reflecting [ph] in are much more materially interested in the products we're offering. And so we see that as a very good thing. Now we are also about 1, 2 quarters way from launching the Webs technology for websites in the Vistaprint brand. And one of the major reasons we are interested in Webs or were interested when we acquired them is they are really an innovator and a leader in the user experience in the creation of a website, the website builders to create small business websites. That is going to be hardwired into the Vistaprint site in the next 1 to 2 quarters. And we've been working on that for 9-plus months. We've already seen in the area of Facebook Pages for small businesses where we've brought the Pagemodo product over into Vistaprint base. We've seen great…

When you bought Webs, you let us know how it's is a premium model and how exposed it was to millions of customers, is this -- in the commentary, you said it's up 25%. Is it still on that premium side out there with huge numbers of -- maybe you can comment on the [indiscernible]

It's actually going -- yes, the free numbers are growing at least if not more quickly than the paying numbers. So the penetration is very significant.

Last question is, and I don't -- I'm sure you won't answer it directly, but maybe just directionally. Is just -- Europe has obviously fallen below your target levels, and if the U.S. is doing right in line or better. And so one wonders what the inherent profitability of the U.S. is and how it must be subsidizing Europe. Is the U.S. returning to profitability levels that we may have seen 3 years ago?

I'm going to let Ernst...

So the U.S. is more profitable than our European business. Our European business is profitable. It's -- they are contributing to our overall operating income. We do disclose every quarter the segment operating income information, so you can -- in our Q, so you can actually historical trends, but the -- our U.S. business is a more profitable business at the moment.

That being said, I would also say that on the margin, we are leveraging a lot of technology and fixed cost into the incremental market, whichever one you want to consider the incremental market. And so if we were to just take one of the markets away, take Europe away hypothetically, it would have a much -- a severe impact on our profitability.

There are no remaining audio questions. I would now like to turn the call back over to Mr. Robert Keane.

Well, thank you, everyone, for joining us on the call this evening. We very much continue to remain focused on our longer-term strategy with a belief that we're building a stronger, more competitively positioned Vistaprint for many years to come. And we really appreciate your time, your attention and we look forward to speaking to you on the next update. Have a good night.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.