Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________________________________ FORM 10-Q ___________________________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA growth of 23% year-over-year to $60.1 million, with adjusted EBITDA margins increasing by 510 basis points to 28.8% due to modest revenue growth and effective cost management [37][60]. - Revenue for the second quarter was $209 million, with the Enterprise channel growing by 22% driven by data engine revenue of $70 million, marking a record quarter [60][61]. - The company raised its full-year revenue guidance to a growth range of 3% to 5%, translating to revenues of $852 million to $869 million [41][67]. Business Line Data and Key Metrics Changes - The E-commerce channel experienced a decline of 12% in the second quarter, primarily due to challenges in new customer acquisition [61]. - Editorial subscriptions have shown strong early momentum, contributing to growth in the Enterprise channel alongside SMB subscription products [50][60]. - The creative engine has expanded significantly, with Shutterstock Studios delivering approximately 50,000 unique productions in the past year [10][24]. Market Data and Key Metrics Changes - The average total contract value (TCV) for data partnerships increased from $350,000 in 2021 to over $7 million in 2023, reflecting heightened customer interest in licensing larger elements of the library [27][60]. - The contributor base has doubled year-over-year, with submissions up nearly 30% year-to-date, resulting in a content library of 784 million licensable assets [29][56]. Company Strategy and Development Direction - The company is focusing on enhancing its data engine and creative offerings, particularly through partnerships with major tech firms like Google and OpenAI [6][55]. - There is a strong emphasis on generative AI, with the company positioning itself to capitalize on the growing demand for AI-generated content [8][58]. - The acquisition of Giphy is expected to significantly enhance the company's advertising capabilities and expand its reach into conversational content [52][65]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing the potential for growth in generative AI and the importance of indemnification for enterprise clients [9][22]. - The company acknowledged challenges in the E-commerce segment but is implementing strategies to improve conversion rates and marketing effectiveness [34][48]. - Management highlighted the importance of ongoing experimentation to understand customer needs and improve product offerings [73][86]. Other Important Information - The company announced a new $100 million share buyback program and repurchased 80,000 shares for $4 million during the quarter [40][66]. - The acquisition of Giphy was completed for $53 million, recognized as a bargain purchase gain of $42 million [65]. Q&A Session Summary Question: Any early progress on conversations with enterprises regarding the new indemnification product? - Management indicated that conversations are underway, and while optimism exists, the indemnification product's impact is not included in the guidance for the second half of the year [46][47]. Question: Can you provide insights on E-commerce performance and marketing strategies? - Management acknowledged underperformance in E-commerce and emphasized the need for increased marketing investment and improved conversion strategies [48][73]. Question: What is the outlook for data revenue retention in 2024? - Management noted that the ability to grow data revenue will depend on expanding existing relationships and acquiring new clients, with no specific guidance provided for 2024 [75][76]. Question: How significant is the advertising opportunity with Giphy? - Management believes the advertising potential from Giphy could reach hundreds of millions of dollars over time, indicating a strong long-term outlook [77][78]. Question: Can you elaborate on the traction in Editorial and Studios? - Management highlighted strong demand in Editorial, particularly after the Splash News acquisition, and expressed optimism about the growth potential in Studios [93][94].

Financial Performance - Total revenue for Q2 2023 was $208.84 million, a slight increase from $206.87 million in Q2 2022, representing a growth of 0.9%[19] - Net income for Q2 2023 reached $50.01 million, compared to $19.45 million in Q2 2022, marking a significant increase of 157.5%[19] - Earnings per share (EPS) for Q2 2023 were $1.39 (basic) and $1.37 (diluted), up from $0.54 and $0.53 in Q2 2022, reflecting an increase of 157.4% and 158.5% respectively[19] - Net income for the six months ended June 30, 2023, was $82.856 million, a 79.9% increase compared to $46.017 million for the same period in 2022[27] - The company reported a net income of $50.01 million for the three months ended June 30, 2023, compared to $19.45 million in 2022, and $82.86 million for the six months ended June 30, 2023, compared to $46.02 million in 2022[118] - For the six months ended June 30, 2023, revenue increased by $18.1 million, or 4%, to $424.1 million compared to the same period in 2022[183] Assets and Equity - Total current assets increased to $273.42 million as of June 30, 2023, compared to $215.67 million at the end of 2022, showing a growth of 26.7%[17] - Total assets reached $1.00 billion as of June 30, 2023, up from $881.18 million at the end of 2022, indicating an increase of 13.6%[17] - The company’s total stockholders' equity increased to $519.51 million as of June 30, 2023, compared to $447.48 million at the end of 2022, a growth of 16.1%[17] Revenue Breakdown - E-commerce revenue for the three months ended June 30, 2023, was $111.90 million, down 12.1% from $127.39 million in 2022, while enterprise revenue increased by 22.0% to $96.94 million from $79.48 million[106] - E-commerce revenues decreased by 9% to $231.7 million, while Enterprise revenues increased by 27% to $192.5 million in the same period[185][186] - The enterprise sales channel contributed approximately 45% of the company's revenue for the six months ended June 30, 2023[139] - E-commerce sales channel accounted for 55% of revenue during the same period, with most licenses coming from self-service web properties[138] Expenses and Costs - Operating expenses for Q2 2023 totaled $200.13 million, compared to $181.50 million in Q2 2022, an increase of 10.2%[19] - Cost of revenue increased by $16.1 million, or 11%, to $162.6 million, driven by increased depreciation and amortization expenses[190] - Sales and marketing expenses decreased by $11.6 million, or 11%, to $95.9 million, representing 23% of revenue[191] - Product development expenses increased by $13.8 million, or 45%, to $44.6 million, primarily due to non-recurring Giphy Retention Compensation[192] Acquisitions - The company recognized a non-taxable bargain purchase gain of $41.9 million from the acquisition of Giphy, reflecting the excess of the fair value of net assets acquired over the net consideration[62] - The total purchase price for the acquisition of Giphy was $53 million in net cash, with additional cash acquired and working capital adjustments totaling $4.75 million[52] - The Company completed the acquisition of Pond5 for approximately $218 million, funded by existing cash and a $50 million drawdown on its revolving credit facility[64] - The acquisition of Splash News was completed for approximately $6.3 million, paid with existing cash on hand[68] Cash Flow and Financing - Operating cash flow for the six months ended June 30, 2023, was $96.589 million, up from $59.574 million in the prior year, reflecting a 62.1% increase[27] - Total cash and cash equivalents at the end of June 30, 2023, were $87.146 million, compared to $84.046 million at the end of June 30, 2022[27] - As of June 30, 2023, the company had $30 million in outstanding borrowings under its $100 million credit facility, with a remaining borrowing capacity of $68 million[88] - The company entered into a five-year $100 million unsecured revolving loan facility with Bank of America on May 6, 2022[209] Subscriber Metrics - As of June 30, 2023, the company had 556,000 subscribers, an increase from 368,000 in the same period of 2022[152] - Subscriber revenue for the three months ended June 30, 2023, was $87.4 million, compared to $84.7 million in 2022, while for the six months it was $178.0 million versus $170.1 million[152] - The average revenue per customer for the last twelve months increased to $374 in 2023 from $359 in 2022[152] Tax and Compliance - The effective tax rate for the three months ended June 30, 2023, was 2.7%, significantly lower than 14.4% in 2022, primarily due to discrete items related to the acquisition of Giphy[110] - The company was in compliance with all financial covenants associated with the Credit Facility as of June 30, 2023[212]

Financial Performance and Key Metrics - Revenue for Q1 2023 was $215 million, representing an 8% year-on-year growth and exceeding expectations, with a 10% growth on a constant currency basis [10][25] - EBITDA reached a record $70 million, growing 27% year-on-year, resulting in a 32% margin [25][40] - Free cash flow was $51 million, allowing the company to fully repay a $50 million revolver while maintaining a strong cash balance of $96 million [14][25] Business Line Performance - Enterprise revenue grew by 33% in Q1 2023, driven by strong subscription bookings and data partnerships [10][26] - Subscription bookings increased by 20%, now representing 34% of total bookings, up from 28% a year ago [18] - E-commerce revenue declined by 6%, primarily due to weak demand in Europe, impacting subscriber count [11][17] Market Data and Key Indicators - The company is experiencing a surge in customer engagement with its generative AI offerings, with approximately 10,000 new accounts created daily [19][102] - The enterprise sales channel is evolving, with a focus on cross-selling multiple content types and enhancing service offerings [48][104] Company Strategy and Industry Competition - The company is investing heavily in generative AI and has partnered with NVIDIA to enhance its 3D capabilities, which is expected to lower production costs and expand use cases [6][10] - The strategic focus is on multi-year partnerships that include content licensing and creative services, aiming for long-term growth [7][28] Management Commentary on Operating Environment and Future Outlook - Management remains cautious about the e-commerce channel, attributing current weaknesses to macroeconomic factors rather than product issues [17][44] - The company raised its 2023 revenue growth guidance to 2% to 3% and expects continued EBITDA margin expansion [46] Other Important Information - The deferred revenue balance decreased to $181 million from $187 million, reflecting the softness in e-commerce [14] - The company is seeing a growing trend among large companies to develop their own generative AI models, which aligns with its strategic focus [71][82] Q&A Session Summary Question: What is the game plan for the e-commerce channel given the current performance? - Management believes the decline is primarily macro-driven and is experimenting with various strategies to improve performance [44][102] Question: Can you quantify the organic growth excluding Pond5? - Management provided baseline figures, indicating that Pond5 contributes approximately $11 million to $12 million quarterly [47] Question: How are companies using AI for commercial purposes? - There is a mix of users experimenting with AI and those using it for commercial purposes, with high engagement levels noted [112][126] Question: What is the outlook for gross margins moving forward? - Future gross margin improvements may come from increased software offerings, which do not incur the same costs as content [120]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________________________________ FORM 10-Q ___________________________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECU ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________________________________________________________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001- ...

Shutterstock, Inc. (NYSE:SSTK) Q4 2022 Earnings Conference Call February 9, 2023 8:30 AM ET Company Participants Chris Suh - VP, IR and Corporate Development Paul Hennessy - CEO Jarrod Yahes - CFO Conference Call Participants Andrew Boone - JMP Securities Bernie McTernan - Needham & Company Youssef Squali - Truist Lauren Schenk - Morgan Stanley Nat Schindler - Bank of America Nick Deflas - Red Burn Operator Good day and thank you for standing by. Welcome to the Shutterstock Inc. Fourth Quarter Earnings Conf ...

Financial Data and Key Metrics Changes - Revenue growth for Q3 2022 was 5%, or 10% on a constant currency basis, with reported revenue declining 1% excluding Pond5 [25] - Adjusted EBITDA for the quarter was $56 million, with margins at 27.5%, up more than 450 basis points year-on-year [29] - GAAP diluted EPS was $0.64 and adjusted diluted EPS was $1.00 [30] Business Line Data and Key Metrics Changes - Ecommerce revenue grew 2% on a reported basis or 6% on a constant currency basis, significantly impacted by weakness in Europe [25] - Enterprise revenue grew 9% on a reported basis or 15% on a constant currency basis, with strong momentum from large brands [26] - Subscriber count increased to 607,000, up 80% year-over-year, with subscriber revenue representing 43% of total revenues [34] Market Data and Key Metrics Changes - North America saw revenue growth of 15%, while Europe experienced a decline of 5%, indicating a 20% growth differential between the two regions [25] - The macroeconomic uncertainty has had a pronounced impact on demand in Europe, particularly in the ecommerce channel [25][10] Company Strategy and Development Direction - The company is focused on integrating generative AI into its product offerings, partnering with OpenAI to enhance its capabilities [16][19] - The acquisition of Pond5 is aimed at expanding video leadership, with a significant increase in the combined video library size [12][13] - The company aims to balance growth and margins while navigating macroeconomic challenges [11] Management's Comments on Operating Environment and Future Outlook - Management noted a softening demand environment, particularly in Europe and ecommerce, but highlighted ongoing strength in the U.S. and enterprise channels [10] - The company is lowering its 2022 revenue guidance to $815 million, equating to 5% year-over-year growth, while raising EBITDA margin guidance to 26.5% [36] - Management expressed confidence in the long-term sustainability of margin improvements and the ability to drive revenue growth [43] Other Important Information - The company repurchased $16 million of shares, completing a $100 million authorization, reducing total shares outstanding by 200,000 [32] - A deferred revenue balance of $174 million increased by $3 million from the previous year, affected by foreign exchange rates [33] Q&A Session Summary Question: Higher margin guidance sustainability - Management indicated that the margin levels are expected to be durable and sustainable, with ongoing efforts to improve gross margins [42][43] Question: Customer demand for AI-generated content - Management noted significant excitement around AI technology, with a focus on providing a platform for exploration and creativity [54] Question: Competitive landscape changes - Management stated that they are focused on their strategy and have not noticed significant changes in the competitive landscape, aside from macroeconomic issues [56] Question: Subscriber behavior amid macro headwinds - No uptick in churn was observed, but new customer demand is focused in Europe, particularly in ecommerce [72] Question: Growth rate differences between North America and Europe - Management highlighted a significant divide in growth rates, with North America growing 15% and Europe 6% on a constant currency basis, attributing some of the difference to foreign exchange [80] Question: Impact of AI on competitive dynamics - Management believes they are well-positioned to lead the change in the industry rather than be changed by it, emphasizing their comprehensive platform [91]

PART I. FINANCIAL INFORMATION This section presents Shutterstock's unaudited condensed consolidated financial statements and management's financial analysis [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Shutterstock's unaudited condensed consolidated financial statements and related notes for specified periods [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific dates Consolidated Balance Sheet Highlights (in thousands) | Item | Sep 30, 2022 | Dec 31, 2021 | Change | % Change | | :-------------------------------- | :----------- | :----------- | :------- | :------- | | Cash and cash equivalents | $76,244 | $314,017 | $(237,773) | -75.7% | | Total current assets | $161,052 | $388,215 | $(227,163) | -58.5% | | Total assets | $840,180 | $851,710 | $(11,530) | -1.4% | | Total current liabilities | $360,073 | $333,784 | $26,289 | 7.9% | | Debt | $50,000 | $— | $50,000 | N/A | | Total liabilities | $409,597 | $383,228 | $26,369 | 6.9% | | Total stockholders' equity | $430,583 | $468,482 | $(37,899) | -8.1% | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income over specific reporting periods Consolidated Statements of Operations Highlights (in thousands, except per share data) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :----------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $204,096 | $194,439 | $610,100 | $567,632 | | Net income | $23,040 | $16,029 | $69,057 | $74,997 | | Basic EPS | $0.64 | $0.44 | $1.91 | $2.05 | | Diluted EPS | $0.64 | $0.43 | $1.88 | $2.01 | - Revenue increased by **5%** for the three months ended September 30, 2022, and by **7%** for the nine months ended September 30, 2022, compared to the respective prior periods. Net income increased by **44%** for the three months ended September 30, 2022, but decreased by **8%** for the nine months ended September 30, 2022[18](index=18&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents total change in equity from non-owner sources, including net income and other comprehensive items Consolidated Statements of Comprehensive Income (in thousands) | Item | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $23,040 | $16,029 | $69,057 | $74,997 | | Foreign currency translation loss | $(6,101) | $(1,842) | $(11,932) | $(1,552) | | Comprehensive income | $16,939 | $14,187 | $57,125 | $73,445 | - Foreign currency translation loss significantly increased for both the three and nine months ended September 30, 2022, impacting comprehensive income[21](index=21&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including net income, dividends, and repurchases Changes in Stockholders' Equity (in thousands) | Item | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | | Balance at December 31, 2021/2020 | $468,482 | $421,925 | | Equity-based compensation | $23,958 | $26,639 | | Repurchase of treasury shares | $(72,812) | $(4,858) | | Cash dividends paid | $(26,004) | $(23,000) | | Other comprehensive loss | $(11,932) | $(1,552) | | Net income | $69,057 | $74,997 | | Balance at September 30, 2022/2021 | $430,583 | $474,896 | - Total stockholders' equity decreased from **$468.5 million** at December 31, 2021, to **$430.6 million** at September 30, 2022, primarily due to significant treasury share repurchases (**$72.8 million**) and cash dividends paid (**$26.0 million**), partially offset by net income and equity-based compensation[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by operating, investing, and financing activities over a period Consolidated Statements of Cash Flows (in thousands) | Activity | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $97,289 | $161,858 | | Net cash used in investing activities | $(257,905) | $(242,407) | | Net cash used in financing activities | $(70,277) | $(46,426) | | Net decrease in cash and cash equivalents | $(237,773) | $(127,995) | | Cash and cash equivalents, end of period | $76,244 | $300,579 | - Net cash provided by operating activities decreased significantly from **$161.9 million** in 2021 to **$97.3 million** in 2022. Investing activities saw increased cash usage, primarily due to business combinations, while financing activities also used more cash, driven by higher share repurchases and debt proceeds[26](index=26&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, acquisitions, debt, equity, and other financial disclosures - Shutterstock is a leading global creative platform, offering images, footage, music, 3D models, and creative design software. Recent acquisitions include Pond5 (video-first content marketplace) and Splash News (entertainment news network) in May 2022, expanding content offerings and editorial capabilities[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) Allowance for Doubtful Accounts (in thousands) | Item | Sep 30, 2022 | Dec 31, 2021 | | :-------------------------- | :----------- | :----------- | | Allowance for doubtful accounts | $3,498 | $1,910 | | Bad debt expense (9 months) | $993 | $182 | - Revenue is primarily recognized from content licenses (subscription and transactional) and creative tools. The company acts as the principal in transactions, recognizing revenue gross of contributor royalties[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) Acquisition Details (in thousands) **Pond5 & Splash News Acquisitions (May 2022):** | Item | Pond5 | Splash News | Total | | :-------------------------- | :------ | :---------- | :------ | | Purchase Price | $218,014 | $6,316 | $224,330 | | Goodwill | $158,957 | $5,565 | $164,522 | | Intangible Assets | $67,800 | $1,263 | $69,063 | | Revenue Contribution (3 months ended Sep 30, 2022) | N/A | N/A | $13,100 | | Revenue Contribution (9 months ended Sep 30, 2022) | N/A | N/A | $20,300 | **PicMonkey & TurboSquid Acquisitions (2021):** | Item | PicMonkey | TurboSquid | Total | | :-------------------------- | :-------- | :--------- | :------ | | Purchase Price | $109,395 | $77,330 | $186,725 | | Goodwill | $71,607 | $59,491 | $131,098 | | Intangible Assets | $44,700 | $21,500 | $66,200 | Goodwill and Intangible

Shutterstock, Inc. (NYSE:SSTK) Q2 2022 Earnings Conference Call July 26, 2022 8:30 AM ET Company Participants Chris Suh - VP, IR and Corporate Development Paul J. Hennessy - CEO Jarrod Yahes - CFO Conference Call Participants Bernie McTernan - Needham & Company Andrew Boone - JMP Securities Youssef Squali - Truist Securities Nat Schindler - Bank of America Operator Good day and welcome to the Q2 2022 Shutterstock, Inc. Earnings Conference Call. At this time all participants are in a listen-only mode. After ...