Shutterstock Editorial and Shutterstock Studios Return for 40th Edition of the World Renowned Sundance Film Festival with Special Events, Portrait Studios and moreShutterstock Studios' Hosts Panel Featuring their Breakthrough Documentary, "Surfing Through the Odds" on Friday, January 19 at 2pm CTNEW YORK, Jan. 4, 2024 /PRNewswire/ -- Shutterstock, Inc. (NYSE: SSTK), a leading global creative platform connecting brands and businesses to high-quality content, today announced that they are the Official House P ...

Shutterstock, Inc. (NYSE:SSTK) Q3 2023 Earnings Conference Call October 31, 2023 8:30 AM ET Company Participants Chris Suh – Vice President-Investor Relations and Corporate Development Paul Hennessy – Chief Executive Officer Jarrod Yahes – Chief Financial Officer Conference Call Participants Bernie McTernan – Needham & Company Youssef Squali – Truist Andrew Boone – JMP Securities Curtis Nagle – Bank of America Operator Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Third ...

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 ...

Financial Performance - Total revenue for 2022 was $827.8 million, a 7% increase from $773.4 million in 2021[24] - Revenue increased from $666.7 million in 2020 to $773.4 million in 2021, and to $827.8 million in 2022, indicating a growth trend[107] - E-commerce revenue reached $501.4 million in 2022, up from $490.2 million in 2021, while enterprise revenue increased to $326.4 million from $283.2 million[24] - Enterprise sales channel contributed approximately 39% of total revenues in 2022, up from 37% in 2021 and 38% in 2020[104] - Revenue from enterprise customers accounted for approximately 39% of total revenue for the year ended December 31, 2022, compared to 37% in 2021[117] - Revenue from foreign currencies accounted for approximately 32%, 35%, and 36% of total revenue in 2022, 2021, and 2020, respectively[343] - The company reported total revenue of $827.826 million for the year ended December 31, 2022, compared to $773.415 million in 2021 and $666.686 million in 2020[345] Customer Base and Market Reach - The company served over 2.3 million customers across more than 150 countries, with 43% of revenue coming from North America, 29% from Europe, and 28% from the rest of the world[26] - The company has over 2.3 million approved contributors, with the top five contributors accounting for less than 2% of downloads in 2022, highlighting the diversity of the contributor base[29] - Approximately 60% of the company's revenue for the years ended December 31, 2022, 2021, and 2020 was derived from customers located outside the United States[160] Product Development and Technology - Shutterstock integrated Dall-E 2, OpenAI's AI-generated content tool, into its platform in 2023, allowing customers to generate unique images based on keywords[21] - The company has invested significantly in product development and cloud-based hosting infrastructure to enhance user experience and improve efficiency[25] - The company continuously invests in technology to improve existing products and develop new services, viewing these investments as integral to long-term success[45] - The company utilizes proprietary AI technology to improve search algorithms and enhance the quality of content offerings[20] - The search platform evolves based on first-party behavioral data, improving search results and user engagement over time[39] - The company has developed proprietary technology that enhances user experience and supports scalable platforms, which is critical for business success[38] Marketing and Customer Acquisition - The company aims to achieve targeted returns on customer acquisition costs through significant investments in online marketing efforts[24] - Marketing efforts have represented a significant percentage of revenue, focusing on customer acquisition through various channels including online advertising and CRM marketing[46] - The company incurred marketing expenses of approximately $97.2 million, $112.9 million, and $81.2 million in 2022, 2021, and 2020 respectively, indicating a significant investment in customer acquisition and retention strategies[90] Workforce and Employee Initiatives - As of December 31, 2022, the company had 1,328 full-time employees, an increase from 1,148 employees as of December 31, 2021, representing a growth of approximately 15.7%[64] - Approximately 63% of the company's global workforce is located in North America, while 32% are in Europe[64] - The company has implemented a Total Rewards program to support employee growth, well-being, and performance recognition[66] Regulatory and Compliance Risks - The company is subject to evolving data protection laws, including the GDPR and CCPA, which impose significant operational requirements and potential penalties for non-compliance[60][61] - Compliance with various laws and regulations is critical, as violations could result in civil and criminal penalties[120] - The company is subject to ongoing legal and regulatory developments that could impact its ability to transfer personal data internationally, affecting service delivery and financial results[146] - The company is subject to increased legal and financial compliance costs due to changing regulations, which may impact operational efficiency[201] Competitive Landscape - The company faces competition from various platforms, including Getty Images, AdobeStock, and free image providers, which may affect market share and pricing strategies[67] - The competitive landscape includes significant media companies and emerging AI technologies, with low barriers to entry posing challenges for market share retention[83] Financial Risks and Liabilities - The company may need to raise additional capital in the future, which could lead to significant dilution for existing stockholders if raised through equity[122] - Total debt as of December 31, 2022, was $50.0 million, with a remaining borrowing capacity of $48.0 million under the revolving credit facility[123] - The company may face significant non-income tax liabilities due to changes in laws or regulations, which could adversely impact its financial condition[177] - The company may be required to expand data storage facilities or build new ones to comply with data localization laws, which could harm its financial condition[150] Cybersecurity and Data Protection - The company faces risks related to cybersecurity breaches, which could expose it to liability and damage its reputation, potentially harming business operations[15] - Cybersecurity breaches could expose the company to liability and costly litigation, potentially damaging its reputation and financial standing[151] - The company relies on third-party service providers for data management, which poses risks of cybersecurity incidents and potential breaches of customer data[145] Economic and Market Conditions - Global economic conditions may adversely affect advertising spending, which is critical for the company's revenue generation[100] - Seasonal trends influence customer behavior, with expected decreases in usage during the summer and increases in the fourth quarter due to holiday marketing campaigns[68] Strategic Initiatives and Future Outlook - The company must continue to innovate and expand its product offerings to meet customer demands and maintain revenue growth[75] - Future acquisitions may lead to potential dilutive issuances of equity securities and significant impairments related to goodwill[110] - The company’s ability to innovate and develop new products is critical for revenue growth, with potential challenges in timely market introduction[94]

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]