Good morning, and welcome to the Pitney Bowes third quarter earnings 2020 results conference call. Your lines have been placed in a listen-only mode during the conference call until the question and answer segment. Today's call is also being recorded. If you have any objections, please disconnect your lines at this time. I would now like to introduce your speakers for today's conference call: Mr. Marc Lautenbach, President and Chief Executive Officer; Mr. Stan Sutula, Executive Vice President and Chief Financial Officer; and Mr. Adam David, Vice President, Investor Relations. Mr. David will now begin the call with the Safe Harbor overview.
Good morning. Included in this presentation are forward-looking statements about our expected future business and financial performance. Forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections. More information about these risks and uncertainties can be found in our earnings press release, our 2019 Form 10-K annual report, and other reports filed with the SEC that are located on our website at www.pb.com and by clicking on Investor Relations. Please keep in mind that we do not undertake any obligation to update any forward-looking statements as a result of new information or developments. Also, for non-GAAP measures used in the press release or discussed in this presentation, you can find reconciliations to the appropriate GAAP measures in the table attached to our press release and also on our Investor Relations website.
Additionally, we have provided slides that summarize many of the points we will discuss during the call. These slides can also be found on our investor relations website. Now, our President and Chief Executive Officer, Marc Lautenbach, will start with a few opening remarks. Marc?
Thank you, Adam. Thank you, everyone, for joining our call. We turned in a good quarter and put up some solid numbers. I'm extremely proud of what the team continues to accomplish, especially while facing these challenging times. Overall, revenue grew 13%. This is an organic growth rate that we have not achieved in well over a decade , and double the growth rate we saw in the second quarter. Although the current environment is contributing to our accelerated growth rate, we recognize the opportunity in shipping well in advance of the current conditions, which is why we spent the last several years making the right investments and taking necessary actions to shift our portfolio to this large growth area that complements our portfolio. Those investments are paying off with our shipping-related revenues comprising half of our overall revenue.
However, the question still remains for all of us, what will e-commerce look like in a post-COVID world? Our marketing and communications team has been conducting weekly surveys with U.S. consumers to gauge several areas, including how shopping habits have changed and where they see these habits in a post-COVID environment. Based on what we are seeing in the market, it is not surprising that the survey results show that 45% of consumers said they now do more than half of their shopping online, which is nearly 3x pre-pandemic adoption. While the duration of this terrible pandemic remains unknown, we do know for certain that the market has shifted dramatically and consumers have adopted and adapted to the online buying, showing up on your doorstep experience.
We are fortunate to have invested in the products and services that help our clients be successful with the post-purchase consumer experience because this is an area that retailers can only afford to get right. Stan will discuss the details of the quarter, but given how the environment has changed over the last nine months, it's important to look at our results from a sequential perspective as each of our business segments turned in a strong quarter-over-quarter revenue performance. Our Global Ecommerce business grew 47% over the prior year, exceeding $400 million in revenue in the quarter, which is a first for this business. I know I said this on prior calls, but it bears repeating. This is a business that barely existed for us eight years ago and is now on track to generate over $1.5 billion in annual revenue, and year to date has grown over 30%.
We continue to process a record number of parcels and sign a significant number of new clients, an indication that we are taking share as our services and value proposition resonate with the market, with more opportunity still in front of us. As we discussed last quarter, the acceleration in demand and volume is bringing us to a level of scale that we originally anticipated achieving in two years. We have more work in front of us to become more efficient, which the team is focused on. We have taken the necessary steps to prepare for a successful peak holiday season. Over the course of the last few months, we signed leases on three new facilities and upgraded another, all of which will be running for peak, and we announced holiday peak pricing.
Unlike some others in the market, we used a simple, easy-to-understand flat rate increase that helps our clients know how to budget for their holiday shipping costs. Given the performance in Global Ecommerce, it would be easy to overlook the quarter-to-quarter improvement in our SendTech and Presort businesses. We are equally focused and well-positioned to leverage the investments we have made in these businesses over the last several years. Within SendTech, we have invested in new product offerings and channels. These investments have allowed us to find new ways to interact and conduct business with our clients while adding value and saving them money. As a result, in the third quarter, we acquired over 8,600 SendPro clients through our digital channel, which is an increase of nearly 80% year-over-year. We are delivering new capabilities around shipping , financing , and building out new revenue and profit streams that are more subscription-based.
We continue to see improved take rates and activation for our shipping capabilities, which grew revenue at a double-digit rate, and our paid subscriptions for our shipping offerings grew over 60%. We also saw a nice improvement in the level of equipment placements , with sales revenue improving versus the prior quarter. We are now placing new mail finishing devices, which is a very important market for us. Shipment of these devices grew nicely in the quarter, and we entered the fourth quarter with a healthy backlog. This business continues to turn in a strong EBIT margin that is within our long-term model range. Given SendTech's contribution to our cash, improving the top-line decline and delivering strong margins is essential to our overall capital allocation strategy. In Presort, we also improved our revenues from the second quarter and improved the bottom line.
Similar to what we are doing in SendTech, we've expanded our Presort Services into the shipping space, creating a new revenue and profit stream for this business around Bound Printed Matter and Marketing Mail flats. Overall, we are making continued improvement and progress across the portfolio, and I expect this momentum to continue in the fourth quarter. I would be remiss if I didn't again thank our employees, clients, and partners alike. Our highest priority remains around their health and safety, and we continue to take all necessary actions. As we head into a busy holiday season, this will be of the utmost importance as we remain diligent and very mindful of everyone's safety. As I mentioned before, one of the hallmarks of our culture is resilience, and that has enabled our company to endure.
Looking at where we are from a longer-term perspective, I like how we are positioned, and I am convinced that we will come out of this pandemic much stronger than we entered. With that, let me turn it over to Stan.
Thank you, Marc. Good morning. Comparing our third quarter results to the second quarter, we doubled our revenue growth and improved overall EBIT dollars. We continued to generate strong cash flow, growing $15 million over the prior year, which puts us at about $186 million year to date. In the third quarter, we repaid the $100 million drawn against the revolving credit facility. As a reminder, we had drawn down against our revolver in April purely as a precautionary measure when COVID ramped up. Given our cash flow generation and that we have no current need for the funds, it was prudent for us to repay it in the third quarter. We continue to see the effects of COVID play out across our business. We remain focused on providing a healthy and safe environment for our employees as well as our clients, partners, and communities.
Even with the COVID impact, we are moving in the right direction, and we expect to gain momentum in the fourth quarter. Let me take you through the details of the third quarter. As in the past, unless otherwise noted, my statements going forward will be on a constant currency basis when talking about revenue comparisons and on an adjusted basis when talking about earnings-related items, including cash flow. Reconciliations of all non-GAAP to GAAP measures can be found in the financial schedules posted with our earnings press release and on our investor relations website. For the third quarter, revenue totaled $892 million, which was a growth of 13% over the prior year. Adjusted EPS was $0.08 for the quarter, and GAAP EPS was $0.07. EPS includes COVID-related costs, which were partly offset by insurance proceeds related to last year's malware attack.
Free cash flow was $85 million, and GAAP cash from operations was $104 million. Free cash flow improved from the prior year due to changes in working capital, largely around the timing of accounts receivable, which was partly offset by lower net income. Looking at our capital position through the end of the third quarter, we ended the quarter with $820 million in cash and short-term investments. This is lower than the second quarter, largely due to the repayment of the $100 million drawn against our revolving credit facility. Additionally, during the quarter, approximately $150 million in cash and short-term investments was invested into longer-term securities, which was net neutral to the balance sheet. During the quarter, we used free cash flow to return approximately $9 million to our shareholders in the form of dividends. We made $5 million in restructuring payments and invested $21 million in capital expenditures.
Looking at our Pitney Bowes Bank, customer deposits grew 6% over prior year to $611 million. Within Wheeler Financial, we funded just over $5 million in new deals, bringing our total funded amount year to date to around $12 million. From a debt perspective, we ended the quarter with $2.6 billion in total debt, which is about $120 million lower than the second quarter and primarily driven by the repayment of the $100 million revolving credit facility in addition to principal amortization on both of the term loans. In terms of our net debt, when you take our cash and short-term investments and finance receivables into consideration, our implied net debt position on an operating company basis was approximately $700 million at the end of the quarter. Turning to the P&L, starting with revenue performance by line item as compared to the prior year. Business Services grew 31%.
We had declines in financing of 5%, support services of 7%, rentals of 9%, equipment sales of 12%, and supplies of 13%. Gross profit was $295 million, with a margin of 33%. This is a decline of about 9 percentage points from the prior year, which largely reflects the shifting mix of our portfolio. SG&A was $239 million, which is a decline of $15 million from the prior year. As a percent of revenue, SG&A was 27%, which is an improvement of over 5 percentage points from the prior year. R&D expense was $9 million, or 1% of revenue, which was down $3 million from the prior year. EBIT was $54 million, and EBIT margin was 6%. Compared to the prior year, EBIT declined by $15 million, and EBIT margin declined by just over 2.5 percentage points, driven primarily by the gross profit decline, which was partly offset largely by lower operating expenses.
Interest expense, including financing interest expense, was $39 million, which was down about $1 million from the prior year. The provision for taxes on adjusted earnings was about $2 million, and our tax rate for the quarter was 11%. Weighted average shares outstanding at the end of the quarter were 175 million, which is about 3.5 million shares higher than the prior year. Let me now discuss the performance of each of our business segments this quarter. In our Commerce Services group, revenue was $538 million, which was a growth of 31% over the prior year. EBIT was a loss of $5 million, and EBITDA was a positive $20 million. Within Global Ecommerce, revenue was $410 million, which is the first time we achieved over $400 million in a quarter and represented growth of 47% over the prior year.
Within domestic parcel services, volumes more than doubled from the prior year to 61 million, driven by over 150% growth in our domestic deliveries. Digital volumes grew nearly 70% over the prior year, driven by strong growth in our digital shipping APIs. In our Cross-Border Services, we saw progress through the quarter, with volumes growing nearly 30% over the prior year, driven by a larger cross-border logistics client and improved demand. This represents a material improvement from prior quarters as we continue to innovate around customer experience. Looking at EBIT, we recorded a loss of $20 million in the quarter, and EBITDA was a loss of $3 million, both of which were an improvement of approximately $2 million from the prior year. The third quarter EBIT margin of -4.8% was a 3 percentage points improvement over the prior year and roughly flat quarter -to -quarter.
As we continue to gain scale, we saw postage, labor, and transportation costs per piece improve as we moved through the quarter. We continue to invest in this business to capture share while this window of opportunity is in front of us. In the quarter, we invested in three new facilities and upgraded another. We are making ongoing advancements in automation for operational efficiency, in our systems to improve data quality and capture, and in cloud-based reporting alerts to better serve our clients. We also continue to be impacted by direct COVID-related items, which we expect some to continue and others to reduce over time. With the additional capacity and the investments we've been making, we are prepared to handle peak holiday volumes. As we have previously announced, we implemented peak pricing for the holiday season , which is very competitive in the market.
Looking at Presort Services, revenue was $128 million, which was a decline of 3% from the prior year. This represents a $10 million increase over the second quarter. First-Class Mail volumes were down 3%, and Marketing Mail volumes declined 8% from the prior year, both of which improved significantly from the second quarter. Marketing Mail flats and Bound Printed Matter volumes grew 37%, and while still a relatively small part of our portfolio, this area represents a new revenue and profit stream for this business that barely existed one year ago. EBIT was $14 million, and EBIT margin was 11%. EBITDA was $23 million, and EBITDA margin was 18%. EBIT and EBITDA margins improved slightly quarter-to-quarter, but declined from the prior year, primarily as a result of the lower volumes processed.
We remain focused on our productivity initiatives, and compared to the prior year, we have improved the pieces fed through our equipment per hour, resulting in 115,000 fewer labor hours to sort nearly 4.1 billion pieces. We expect these productivity gains to continue going forward. Turning to our SendTech segment, revenue was $354 million, which was a decline of 7% from the prior year. This is an improvement of $33 million over the second quarter. Equipment sales declined 12% versus the prior year, which is a significant improvement from the second quarter. We also saw a nice monthly improvement through the quarter, with September declining only 2% from the prior year as the business environment started to recover. We continue to see good demand for our SendPro Mailstation, a first-of-its-kind device with meter and cloud capability.
This product is a replacement for our lower-volume mailers, which are ideal for remote setups and for branch offices of large organizations. Since launching in April, we have shipped nearly 12,000 units, exceeding our expectations. Shipments of our mail finishing devices in the U.S. grew at a high single-digit rate over the prior year, and we entered the fourth quarter with a healthy backlog. This is a leading indicator for equipment sales revenue and points to continued sequential improvement in the fourth quarter. It also shows that our new product line, which we believe is well ahead of what the competition is offering, continues to yield a positive response in the market. Supplies declined 13%, which is a significant improvement from the second quarter as usage and demand started to improve. With investments in our digital capabilities, we are making it easier for clients to order and reorder supplies.
In the U.S., two-thirds of our supplies transactions are conducted online. Financing revenues declined 5%. This quarter includes gains related to the sale and reinvestment of proceeds into long-term securities. Combined, rentals and support services declined 8% from the prior year, largely due to the lower portfolio. We continue to see growth in our SendTech shipping revenues, reaching $32 million in the third quarter and growing at a double-digit rate. Specifically, our SaaS-based SendPro Online offering grew its paid subscriber base by over 60% from the prior year. The impact of shipping growth in SendTech goes beyond our hardware and SaaS-based offerings. In the third quarter, our clients who finance their shipping activity with us doubled their shipping label volumes from the prior year. Despite the decline in SendTech's revenue, the EBIT margin remains solid and within our long-term model range. EBIT was $113 million, and EBIT margin was 32%.
EBITDA was $121 million, and EBITDA margin was 34%. Importantly, the quality of our financing portfolio remains healthy, and delinquency rates are trending down from the initial small uptick that we saw in the second quarter related to COVID. We are also seeing improvements in payment behavior trends from the second quarter. We continue to monitor and take a disciplined approach to credit risk management daily. Before we take your questions, let me recap. While this pandemic has caused disruptions across industries, we are fortunate to have made the investments in our products, services, channels, and network to be able to continue to work with our clients and grow our business.
We remain focused on our balance sheet and liquidity position, having paid down the $100 million of our revolving credit facility using cash on our balance sheet and still maintaining a strong cash position of approximately $800 million at the end of the third quarter. We grew revenue 13%, an organic rate we have not achieved in well over a decade. We have achieved other noteworthy accomplishments around Global Ecommerce revenue, Presort productivity measures, and SendTech shipping capabilities. All strong proof points that our strategy to create a simplified business model focused on shipping and mailing , with financing options underpinning the business , is getting traction. Due to continued uncertainty around COVID, we will continue to suspend our 2020 guidance. Overall, we expect continued progress with sequential improvement, largely in Global Ecommerce in both revenue and earnings in the fourth quarter.
We are operating in a very dynamic environment, but we remain focused on the long term, and that has served us well. We are well positioned to capitalize on the market opportunities ahead of us and believe that we will exit this pandemic as a stronger company. Now, before we take your questions, Marc would like to make a brief statement.
Thanks, Stan. 15 years ago, I was running the Americas for IBM, which was, at the time at IBM, one of the most difficult jobs there was. My then CFO, Jim Kavanaugh, had been in the role for several years. Jim was a terrific executive. He subsequently went on to become the CFO of IBM. I got a call from Mark Loughridge, who was the then CFO of IBM, and said, "We're going to make a change, and we're going to put this fellow, Stan Sutula, behind Jim." Obviously, I was concerned, given I was new to the role as well , and the difficulty, and candidly, Jim was a terrific executive and hard to backfill. That began a relationship that I've enjoyed for the last 15 years, both professionally and candidly, personally as well.
Stan and I, over the past 15 years, have had an opportunity to talk about his career aspirations. Since I first met Stan at IBM, his aspiration has always been to be a CFO of a super-large company. Today , we're announcing that Stan will be leaving Pitney Bowes and joining Colgate-Palmolive in the coming weeks. I was able, a couple of years ago, to convince Stan to take a detour from his ambitions and to join us at Pitney Bowes in what I thought was, and still think is, going to be one of the most successful transformations in the industry. Stan put his aspirations and ambitions on the sideline to help me out over the last three or four years and has accomplished a lot. He helped land what was one of the most ambitious systems and process reengineering programs I've ever seen.
More recently, he has helped, along with the great support and leadership of Debbie Salce, an important refinancing that sets the basis for our future. As you see in today's results, the company is now on sustained revenue growth , in what I would say is soon to be sustained revenue and profit growth. As Stan and I talked about his next steps, and we've been talking about his next steps over the last 12 months, it was important to Stan, and obviously important to me, that we make this transition when the company is at a position of strength. Over the last several quarters, it's become imminently clear to myself, to the board, to Stan, that that moment where the company is strong is now.
As much as I hate to announce it and hate to lose such a wonderful colleague, now is the time for Stan to move on and fulfill what has been a lifelong ambition. While I hate for Pitney Bowes, and candidly hate for myself, to lose such a strong executive and wonderful colleague, at the same time, it's wonderful to see such a great person, such a quality person, have such an incredible opportunity. I kept on trying to convince Stan that we'd be a $20 billion company soon enough, but I couldn't get the accountants to agree with my assessment. Stan will be with us through the end of next week. We've begun a search. I would tell you, we've got a great list of internal and external candidates, and that slate continues to get better and better.
It's my hope within the coming weeks that we're able to backfill Stan, and I'm quite confident we'll have a great executive. With that, we'll take your questions for this morning.
Ladies and gentlemen, if you'd like to ask a question, please press one then zero on your telephone keypad. You may withdraw your question at any time by repeating the one-zero command. If you're using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a question, please press one then zero at this time. One moment, please, for your first question. Your first question comes from the line of Kartik Mehta from Northcoast Research. Please go ahead.
Hey, good morning. First of all, congrats, Stan. Wish you the best of luck. Marc, I wanted to ask you about the Global Ecommerce business. Obviously, you're driving revenue, really benefiting from the trends that are happening. I'm wondering if you could talk a little bit about the EBIT losses. I thought maybe the incremental revenue might help out a little bit more from incremental profits. I was just wondering if you could give a little bit more detail about what's happening there and what your outlook would be for that segment in terms of getting to profitability.
Sure. If you look at the performance in the quarter, and Stan alluded, not alluded to this, he said it, the increased revenue improved the unit cost at a postage perspective, at a transportation perspective, and at a labor perspective in precisely the way that candidly we expected and consistent with the long term. What didn't improve on a quarter-to-quarter basis was the warehouse cost. Now, there are a couple of different dynamics underneath that. One, as Stan mentioned, we added three new warehouses to the network in the quarter. You had the incremental expense , and I would say partially utilized or not at all utilized warehouses. That was number one. The second thing is, and I said this in the second quarter, we're not as efficient inside the warehouses as we will ultimately be.
If you look at the revenue performance, it drove the kind of scale benefits at a unit cost level that we were expecting. The warehouse is still in front of us. As it relates to going forward, I'm going to resist the notion of calling it an inflection point or a particular timeframe for profit. The principal reason is that there's just so much uncertainty around COVID. It's hard to have a ton of confidence. What I would tell you about the fourth quarter is, mathematically, I could lay out for you a very logical rationale for why this business will be profitable in the fourth quarter, but it's predicated on two important factors. The first is COVID, in that COVID doesn't get substantially worse. We don't lose a facility within the network. End user demand doesn't go to hell, et cetera.
The second is that our own efficiency inside the warehouse continues to improve at the level we expect. I'm not going to call a particular quarter for profit. I will say the third quarter kind of yielded the unit -cost benefits that we see, and we're knocking on the door of profit overall.
Stan, I saw that other income was a benefit this quarter. I'm wondering if you could just talk a little bit about maybe what that is and give some context around that. Thank you.
Kartik, first of all, thanks for the question. When you go look at the other income, we had the malware attack last year, as we've disclosed previously, we have gotten some proceeds from insurance. The primary driver of the other income is the Ryuk proceeds from the insurance companies. We continue to work through that overall. What I would emphasize, though, is that we just finished talking about the impact of COVID on the business. I would tell you that the COVID impact on the business outpaces the Ryuk proceeds we received in the quarter. Look, we run this for the long term. There are going to be puts and takes here as we go through the quarter, COVID definitely outpaced the gain we had from the Ryuk proceeds.
Let me make one other point about the fourth quarter to your question. Kartik, one of the meaningful things that happened in the industry over the last 90 days is that the industry put forward pretty meaningful price increases. Our competitors put price increases out for peak. We followed suit, albeit to a slightly lesser extent than competitors, and hopefully in a much more customer-friendly way. If you look at the expected volume in the fourth quarter, and you look at the price increase at a per-parcel level, it's a meaningful benefit on a quarter-to-quarter basis. As you think about the overall business, that price increase for the fourth quarter and how prices work out into next year is a really important dynamic. It's why I'm more confident than I've been about the business, in that there's some pricing leverage in the marketplace.
Stan, just one last question. Are you able to just kind of frame up the additional costs you're seeing because of COVID-19? Even if it's a range, just to get an idea of the type of pressure it's putting on the P&L.
Yeah, look, if you look across the business, and look, it's as you would expect, there are some easy ones to put your finger on, like PPE activity we're buying. There are broader impacts. What I'm talking about is the more direct impact right now. You should assume we're in a neighborhood of very high single-digit millions. That does not include the impact to, I'd say, the sales side of the business. When we have SendTech , and you can't get into a client site to do the install, hence you can't recognize revenue, I'm not including that impact. We're talking about the impact of staggered shifts, the impact on paid time off if you've tested positive or been exposed. I'm talking about the PPE. Remember, we're setting up three new facilities, so you have to go set all that up.
It still has an impact on the business. We, I think, are getting significantly better at managing it. Our primary focus is that we're going to put that expense aside. We have to keep thousands of workers healthy and safe in our facilities, and we're not going to spare expense in taking that on.
Thank you very much. I really appreciate it.
Thank you.
Your next question comes from the line of Anthony Lebiedzinski from Sidoti & Company. Please go ahead.
Good morning, and thank you for taking the question. Yeah, first congratulations, Stan, on your new opportunity. It certainly sounds pretty good. If we could just step back a minute. Can you guys talk about the revenue trends that you saw throughout the quarter? I think, Stan, you also touched on , I believe , the SendTech business seeing some meaningful improvement in September. If you could just go over the different segments as to the progression of the revenue trends throughout the quarter, that'd be good.
Sure, Anthony, thank you for the question. It's interesting because it varies by business. If you take a look, August tends to be a lull for most businesses, given the international nature, heavy vacation time, et cetera. If you take a look at the total, we certainly saw that in total. Let me go kind of segment by segment. Global Ecommerce started off with a stronger July, and that's really catching up through some of the volume that was coming in through the end of June. August came down but still grew 40%, and then in September, it started to gain momentum here, essentially growing at the same rate as the full quarter.
Global Ecommerce, one of the things we talked about is when you have that lull in August, we had a decision to make, and that decision was, do we pull back on all the staffing that we set up in Q2 to handle the surge of volume? We elected not to do that. We elected to try to manage that because we knew we had a peak holiday season coming up, and it is getting tougher to get labor out there. We maintained that activity for the staffing. If you go to Presort has a seasonality as well, both by week and by month. I would tell you that we gained momentum heading into September and actually had a small amount of growth, and that really is coming from the volumes.
I would tell you those bounce up and down a little bit, depending on what's happening. Down 3% for the quarter, and we eked out a little bit of growth in the month of September. I think SendTech is the interesting one. We were down double digits in July, and then August and September got better, and we ended up down 7%. That's a material improvement from where we were last quarter. I think one of the important aspects is those equipment sales. Last quarter, you're down 32%, this quarter down 12%, and as we exited the quarter, we were down 2%. That could be impacted by COVID, the ability to get in and install machines within clients. We've also changed our go-to market with the new SendPro Mailstation. That gives us other avenues to try to grow that revenue.
I would tell you, I think we exited the quarter with some good momentum here on that. As we look towards the fourth quarter, we expect to see continued growth.
Got it. Yeah, thank you for that. Your free cash flow has improved year to date in the third quarter. How should we think about free cash flow for the balance of the year? As far as 2021, can we expect the free cash flow to continue to improve?
Free cash flow, again, Anthony, thanks for the question on that. Free cash flow for the quarter was quite good at $85 million of free cash flow, and that's up year-to-year. I think the more important one or the more interesting one is the $186 million on a year-to-date basis. Now, certainly, some of that comes from finance receivable runoff, which is never how we want to generate free cash flow. I would tell you that that's becoming less there, and that's a good news story because you're adding earning assets back to the balance sheet. If you take a look at where we are year-to-date, we're actually higher than where we landed last year. Now, in the third quarter, one of the drivers in the third quarter was some timing around accounts receivable.
Accounts receivable, while it was a big contributor, we improved our DSO. Some of that's going to be timing, and I think it will revert back in the fourth quarter. I think it's important to step back and take a macro view. When this COVID first broke out, there were a lot of questions around how much free cash flow we could generate, and I've been really proud of the team. The leadership team here knows I am a hawk on cash. We bring it up and talk about it every week and every day. They have done a terrific job on collections, managing delinquencies, being proactive, managing inventory levels , and CapEx investments, and that balance has allowed us to deliver a strong free cash flow.
As we close out the year and look into next quarter, I'm confident we're going to be in a good position for the full year. I do think we'll see accounts receivable level out a bit, and that's going to come back, and I think you'll see a flip-flop on the timing. That also depends on what happens in the fourth quarter and the level of billings, particularly in December, as you know from that. I always step back, look at the fundamentals. We're ahead of last year on a year-to-date basis by a material amount, and the DSO is improving, and I think when you look at that combination, that portrays well for the future.
Got it. Okay. Thanks for that. I guess my last question, looking at the Global Ecommerce, the revenue growth accelerated from 2Q to 3Q. If you could perhaps parse out and maybe give us some color as far as organic growth versus growth from new clients that you signed up for this year.
Well, they're all organic. There's been no acquisition activity-
Right, right.
Within Global Ecommerce. We added over 100 clients in Q2, and I would tell you those are still onboarding, so we have not felt the full benefit from that. Adding three new facilities and expanding a fourth, and those three new facilities as of the beginning of next week will all be up and running. We have two up and running. The next one will be up and running at the beginning of the week to satisfy the peak. When we look at the cohort for this quarter, we also added a significant number of new clients whose volume is not yet in, and I think that portrays well. I think what it really says, though, Anthony, is that the value that we're bringing in a marketplace is resonating with clients. We've made the investments to better serve those clients, and we're built on e-commerce.
We're not trying to convert a B2B to a B2C. That focus and weaving in technology, I think, has resonated with clients. I would expect that we're going to see continued contributions. Again, the third-quarter clients are all going to be largely incremental in front of us.
I would just build on that. I think the short answer to your question is that it's all organic, and there's very little impact from the new customers. Without being specific, new customers in the third quarter were roughly the same as the new customers in the second quarter. That's in front of us. If you step back at an industry level, Stan wrote and made a really important point. We have a fit-for-purpose network that is B2C, e-commerce oriented, which is different than anyone else in the industry. The other thing I'd say is that the industry is out of capacity. We're picking up share because there's just nowhere else to go.
We believe these relationships are quite sticky because of the capabilities that we have oriented and candidly the way that we're talking to these customers. It's a unique opportunity. It's one that , to a degree , we saw coming, but it's clearly been compounded by what's gone on with COVID and how buying habits have changed.
Thank you very much, and best of luck.
Thanks, Anthony.
Your next question comes from the line of Ananda Baruah from Loop Capital. Please go ahead.
Hey, thanks, guys. Good morning, and thanks for taking the question. Yeah, Stan, congrats. We'll miss working with you. Hey, who knows, maybe there's some [Norman] box seats in your future. Maybe. I got a couple here. If I could. You mentioned, I think it was anecdotally in the prepared remarks , something about, this is paraphrasing, strong momentum into the December quarter, or I guess we're in the December quarter, strong momentum for this quarter. From a higher level, could you just clarify that? I would love to get a little bit of context. I know you're not giving guidance, but how to think about that momentum, maybe any leverage across the businesses, the moving parts so we can think about how to sort of set margins and earnings for that.
At least so we can think about how we can kind of do that ourselves , since you're not giving guidance. I have a couple of follow-ups.
Okay. A lot in that question, Ananda, but let's see what we can do. First of all, on the momentum point, we have always stayed focused on investing for the long term. I think what you're seeing over the last couple of quarters, in particular, is a manifestation of that coming through in our results. If we had not invested in our network and Global Ecommerce way ahead of the curve, we would not have been able to handle the capacity that's coming in. We've seen momentum in that business with a dramatic surge in volumes. Our volumes more than doubled on the domestic deliveries here in the quarter , and a dramatic surge in revenue. We feel well prepared to handle peak and heading into the peak season, I think you'll see that momentum continue. We feel pretty good about that.
Remember, we grew 13% in a quarter. We've grown 7% year-to-date. I think it's a really good sign for the time the team has put into this. It's not just GEC. When we look at momentum, we've seen SendTech get better quarter-by-quarter. While we're down 7%, that's a much better performance than it was in Q2. We are starting to see clients slowly reopen, and we've adapted our ability to do that. I'm encouraged by what you see in shipping. Shipping is over $30 million. It's growing double-digit, and the paid subscribers grew over 60%. That's a new revenue and profit stream for that business that I think portrays well for heading into the future. With Presort, you definitely feel the effect of Marketing Mail and First-Class M ail, but that got better as well.
I'm encouraged by what Debbie Pfeiffer and her team have done to build out productivity, and they have a very good foundation to grow for the future. We've made investments in that business. When you think about the Bound Printed Matter and Marketing Mail flats, that business essentially didn't exist a little over one year ago, and it's growing over 30%. That represents another new revenue and profit stream. Again, is it going to be a straight line? No, but I like the momentum heading out of the quarter and heading into the fourth quarter and next year. With that incremental scale and base, I think it gives us the opportunity to also improve margins. GEC, I think we will see the benefits of that scale. We've seen it in Q2. We see the signs of it in Q3, but there are some headwinds.
We have some Ryuk proceeds this year. They're not going to be there next year. We've got a headwind as we go through. Like every other company, we haven't traveled and all that kind of stuff. That will become a headwind heading into next year. I like the foundation of where we are. It's solid, which allows you to build a good business off of it, which I think we've done for go forward. In the margin in the SendTech and Presort businesses, they're well-run. The SendTech business with Jason Dies and his team is still in their long-term model range despite the declines, and I think they have positioned themselves to come out stronger out of this pandemic than when we entered.
Presort, as the volume picks up and we expand our offerings, I think there is a great opportunity for Presort as well , heading into demonstrating margin improvement.
The exit rate for both Presort and SendTech of the quarter was higher than the overall quarter. One way to answer your question or to think about it, I guess, as you phrased it, is to look at the exit rates of the quarter. In the two mailing businesses, the exit rate was stronger than the overall quarter. In Global Ecommerce, what I would point you to is, first of all, the macroeconomic circumstances where Global Ecommerce has just taken off. We recently did a study. Now , 47% of consumers do 50% of their shopping via the internet, via e-commerce. There's strong macroeconomic momentum in that marketplace. The price increase helps with revenue. Candidly, the new customers, we haven't felt the impact of that yet. That's one way to look at it.
The other way to look at it is, what the heck's going on with COVID? That's kind of the wild card, and that's why we continue to be cautious about making predictions, because it's just too hard to understand what the overall impact is going to be from COVID, both at a macroeconomic level as well as a microeconomic level. I reflect back on March, and I shut down the offices around the world, and I thought I was shutting them down for a few weeks. We're now almost to November, and most of the offices still aren't open in the United States, and it's scattered around the world. There's no way I ever would have predicted that. We have a high degree of humility about predicting the future here.
Marc, that's helpful. Let me dovetail that one more question and then a quick housekeeping item. Given all that's occurred and the investments, I know there's a bunch of levers to what's going on in Ecommerce. Are you guys thinking any differently , given what's going on with volume and share gains in the near to intermediate term , about the investment strategy , and should we think differently about sort of the get to profitability exercise that we were thinking about pre-COVID? The reason I'm asking that is that this obviously comes up a lot with the question, and we work through it ourselves in our modeling. If we should be thinking differently about it, given the volume opportunity, the scale opportunity you guys have in front of you, I want to at least be aware that we should be thinking about it differently.
In general, I would say the answer is no, we're not thinking about it differently with this caveat. If you project out a couple of years, it might be that the overall level of EBIT is the same as what we had talked about in the original model, but at a slightly less margin. That would speak to the mix as well as kind of where you are in the efficiency curve. The overall EBIT opportunity and EBITDA opportunity, I think , are pretty consistent with what we see. It might be over slightly more revenue and therefore less margin, but that's not a long-term issue; it's the next couple of years.
Got it. Quick housekeeping. Stan, the dynamics with other income that you spoke to for the September quarter, is that now complete , or will any of that sort of bleed into the December quarter as well?
As we said again , the Ryuk insurance proceeds were there. We still have some ongoing discussions with the insurance companies, but as you all know, there's no guarantee on how that would play out. We did have one other small settlement going the other way in other income, working with a client. Will that continue? We'll work through the rest of it with the insurance companies , and we'll see how that plays out. COVID, we think , is going to continue heading into the quarter. We have our eyes wide open. That's one of the reasons we're not providing guidance , because it's so dynamic and not knowing where that's going to go.
Again, we stay focused on the health and safety of keeping thousands of employees coming to our production facilities, and we're not going to scrimp in that area. If that has a bigger impact, that will flow through, but we're not going to scrimp in that area.
Okay, great. Thanks, guys.
Thanks, Ananda.
Your next question comes from the line of Allen Klee from National Securities Corporation. Please go ahead.
Good morning. You guys mentioned that delinquencies have been improving sequentially. How should we think about when you might reconsider your strategy with Wheeler Financial, that you'd be comfortable enough to maybe kind of ramp that up to what you had thought in the past?
Thanks, Allen. When we look at delinquencies, while it certainly bumped up, our portfolio, I think, has performed very well going through that. Part of that is Christopher Johnson and his team; they're proactive. We're reaching out to clients that we think are going to be affected and working out some of those arrangements. I think that's been a positive effect overall. In terms of portfolio, we wrote about $5 million of business, and originated $5 million of business through funding this quarter. That puts us about $12 million year to date. We said that we believe this would be less than $25 million for the year. I think you could see us probably in that ballpark. Look, we're going to see how the market evolves and develops; it's not just third-party leasing.
We do a lot of third-party lending, which has a very different profile, less cash consumption, good turns, and good profitability. What I would leave you with is we're not going to give guidance on that part of the business. If the market opportunity is there and the returns are there, we will be prudent. As we look at this part of the business, we still think that it has a great long-term opportunity. We are not going to do deals that don't make sense financially, and we're not going to do that just to fill up a portfolio, and I think we've demonstrated that discipline.
I would say the same thing. Stan's right. We started out with a view that we were principally focused on equipment lending. That market place has obviously become pretty hard to price risk. What we're focusing more on now is what Stan said, and that is working capital. That's a little bit shorter duration. It's higher velocity. It's easier to price the risk. The principal answer to your question is that we'll deploy more capital when I can price, when the team can price the risk better. Right now, I'm highly cautious about our ability to price risk.
Thank you. My last thing is on Global Ecommerce. First, you talked about getting your unit economics improved with the one area that is still more of a work in progress , being a warehouse. What are you actually doing to try to get better productivity out of the warehouse? Then the other question is, you mentioned Cross-Border volumes were up nearly 30%. You got a new customer. Could you just dig into that a little more to help us understand what's going on there? Thank you.
Sure. The answer to what you are doing in order to get better in the warehouse is the first is utilization. Right? We brought on three new large facilities in the quarter. They were obviously not utilized or not very utilized in the quarter. Number one is utilization. Number two is that the labor inside of those four walls is still pretty new, and there's a learning curve of the labor around the prosecution of their jobs. The third thing I would point to is if you look at where the network is coming from, each one of the facilities is kind of its own world. Standardization of processes and standardization of technology across the network is really important.
When you look at the summation of all of the different warehouse initiatives around efficiency, it's easily measured in the tens of millions of dollars that we have in our sites over the next year or so.
Yes. The only thing I'd add to that, Allen, is that productivity, we don't view that from just a single lens. We've talked previously about, we've done time and motion studies, process studies. When Nick Smith and his team sits there, we attack this from every angle. We use robotics, we're using automation, we're streamlining the processes across our facilities, and we're looking end-to-end about how we do things. I think they're making some good progress. Now, the other question was around Cross-Border, and Cross-Border is really a function of a few items. One, there's just recovering demand in a marketplace. If you think back to the beginning of the pandemic, many areas simply shut down and did only domestic-type activity. We've seen that reopen, and then we've seen a nice uptick in that business.
The client that we referenced is not a new client, but it is an existing client with growing volumes, and that certainly has been helpful. That business is something that we spend time on and think we have a good client experience as we do that. I'm encouraged to see that part of it pick up again. I think it contributes to the total. I would step back and look at when we're growing here, this is multi-components that we have. We certainly have domestic delivery, we've got returns, we've got fulfillment, we have the digital experience, which we manage with the physical side, we have Cross-Border, and that's what makes up Global Ecommerce.
Born for e-commerce, not again, born to do B2B, and I think that we're seeing that manifest in a good client experience and good growth in the business, and I think we're gaining share.
Thank you so much, and best wishes and success.
Thanks, Allen.
Your next question comes from the line of Shannon Cross from Cross Research. Please go ahead.
Thank you very much. I join everyone in saying congrats to Stan, and we'll miss you. I think it's interesting that the recruiters out there are probably looking at imaging companies these days as great trainers of CFOs. If you think about Luca went to Apple, you're going to Colgate, and Steve Fieler at HP is going to HP, or to Google, sorry. It seems like a great training ground, and we wish you well. I guess my first question is, you had some price increases, or you've announced some price increases from an e-commerce perspective in the fourth quarter because of volumes , and I think some of the incremental costs. How are you thinking about the ability to hold those as you go into the first quarter? Overall, can you talk a bit about the pricing power that you're seeing in the marketplace? Then I have a follow-up. Thank you.
The short answer is we're not certain how pricing works out next year. That being said, if you look at the other participants in the industry, they're all talking about continued constraints within their networks. They're all talking about, and to a degree, complaining about lower margins than they're used to. While it's not certain, and we're a price follower in some ways in this marketplace, when I look at the others that have recently announced earnings, when I hear continued supply constraints across the network, I hear commentary on margin pressures that are dilutive to their overall business.
That personally leads me to the conclusion that I think it's more likely than not that prices continue to drift up, but it's an open question. As I said, we're a follower here, not a leader, but we pay close attention. I think the preponderance of evidence, Shannon, from where I sit, suggests that prices go up, not down. You've got on top of that labor, which is increasing as well.
Yeah, Shannon, the only thing I'd add to that is it's not just tied to peak holiday and a flow-through. As we've gotten bigger, the scale that that brings gives us a we've talked about adding a large number of clients in Q2, a large number of clients in Q3, and when we grow that business, we also get some pricing leverage in that area. Candidly, we weave a lot of technology into what we do, and leveraging that technology, I think we could continue to price smarter and better serve our clients and get more sophisticated as we go through that.
Gregg Zegras and his team we talked last quarter that we brought in some help that looked at our pricing structure. We're seeing some benefits from that. I think the combination of scale and limited capacity in a market, I think leaves us in a really good position as we go forward.
If you just did our math. If you assume that $0.50-$1 of price increase is realizable across volume of 250 or 300 million parcels, you kind of get the order of magnitude of what's potentially available to you if pricing conditions, I won't say improve, but at least stay where they are.
Yeah. It seems like there should be some pretty significant leverage, assuming costs don't go up commensurately for whatever COVID reasons , or hopefully, we'll be past that at some point here. I guess, how do I think about the time to ramp new customers within Ecommerce since you're signing so many? I'm sure they're various sizes, but have you been able to speed that process , given you've gained so much expertise in the last couple of quarters?
It's actually a good question, Shannon. Oftentimes, it's not just a one-sided affair. That's why our clients become our partners in this endeavor, because sometimes it's when they are ready to do the cut-over, and they want to ramp up, not go big -bang , oftentimes. We'll often start with a ramp-up process. I would tell you, I think we're getting better at that with our clients, and the added capacity that we brought into the network absolutely helps. Just candidly, as we've ramped up the volume significantly and opened up, the management teams are getting far more experience. Again, Nick Smith's team, as they go through this, has done a good job of improving that client experience. We weave the technology in so we get better tracking, better reporting for the clients.
This is often the partnership between the two on how fast do they want to go and what facilities they're going into. I think we're seeing an acceleration in that space.
Great. Thank you. Again, Stan, congratulations. One last question. Marc, how are you running the CFO during your search? Do you have an interim , or are you just relying on the team?
Both. We've announced Joe Catapano is our Chief Accounting Officer, who will look after the function while we're in the middle of a search. Joe obviously has a broad understanding of the company and will be an able set of hands to lead while we conduct the search. As I said, I don't expect the search to go on terribly long. We've had a head start here.
Great. Well, thank you so much. Take care.
Thanks, Shannon.
At this time, there are no further questions.
Terrific. Let me close. Again, I'd be remiss if I didn't , for one last opportunity , thank Stan for your contribution and what you've done for our company , and from a personal perspective, you've been an incredible partner, and you'll be sorely missed inside of these four walls, but I fully expect that I will continue to see you on a regular basis. I'm certain I speak for all of us that we not only wish you well, but we'll all be moving to Colgate-Palmolive products. Listen, some of you are new to the Pitney Bowes story. Others have been following and investing for a while. Some of you have been following and investing for a long while.
For those who've been following the company for a bit, this quarter's performance, 13% growth and 7% growth for the year , is a different performance than you saw a few short years ago. It would be easy to conclude that the company is now succeeding in spite of our issues over the last couple of years. I would come to precisely the opposite conclusion, and that is , we're succeeding because of the conscious and purposeful decisions we've made over the last several years. It is not easy, you see the reticence of others in other industries to move to new channels. It's expensive. It takes time to build a tele channel. That was a great thing to do in 2014. More recently, digital channels it takes time to invest in new products, in new capabilities.
If you look at the SendTech story, it's new products with new channels that didn't exist a few short years ago. Global Ecommerce as a business didn't even exist. It's certainly disruptive and hard to re-engineer and automate every business process. It's a slog. More recently, it's painful to invest in front of demand, but that is the nature of e-commerce. If we had not invested in front of demand in e-commerce, we wouldn't be able to grow 47%. You see what others can do that haven't made those investments. It's a much more modest level of growth. We've always pointed to the aspiration of creating long-term value. That continues to be our North Star. What I would tell you now is you're starting to see what the long term really looks like. We're not done, and we've got more to do.
As I reflect back, and as we pointed to our objective of creating long-term value and long-term capabilities, third quarter was a glimpse. Fourth quarter will be another one. We know we'll continue to put points on the board. As I said, more to do for sure. I think it's worth a reflection because , as you look at the overall industry, there are many different theories of how it is you create value and how it is you run businesses. We've taken a different approach. It was in some ways a more painful approach, but it is consistent with our thoughts on how it is you create long-term value. More to do. We've got a lot of work in the fourth quarter. Stan, again, we will wish you well, and we'll talk to all of you soon. Thank you very much. Be safe.
Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.