Revenue Performance - Third quarter revenue was $260.1 million, an increase of $9.5 million or 4% compared to the third quarter of 2024[4] - Revenue from the Content product offering decreased by $9.3 million, or 5%, to $194.4 million, representing 75% of total revenue[5] - Revenue from Data, Distribution, and Services increased by $18.8 million, or 40%, to $65.7 million, accounting for 25% of total revenue[6] - Revenue for Q3 2025 was $260,094,000, a 3.0% increase from $250,588,000 in Q3 2024[36] - Total revenue for Q3 2025 was $260,094 million, representing a growth of 4% from $250,588 million in Q3 2024[47] Net Income and Earnings - Net income for the third quarter was $13.4 million, down from $17.6 million, with net income per diluted share at $0.37 compared to $0.50[7][8] - Net income for Q3 2025 was $13,387,000, down 24.8% from $17,615,000 in Q3 2024[36] - Basic earnings per share for Q3 2025 was $0.38, compared to $0.50 in Q3 2024, reflecting a decline of 24.0%[36] - Adjusted net income for Q3 2025 was $36,429 million, compared to $46,351 million in Q3 2024, reflecting a decline of 21.4%[43] Cash Flow and Liquidity - Cash and cash equivalents increased by $49.1 million to $165.5 million, driven by $78.4 million of net cash from operating activities[12] - Cash and cash equivalents increased to $165,536,000 as of September 30, 2025, up from $111,251,000 at the end of 2024[38] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $130,473,000, compared to $24,680,000 for the same period in 2024[40] - Net cash provided by operating activities for Q3 2025 was $78,390 million, a significant increase from a cash outflow of $11,585 million in Q3 2024[48] - Adjusted free cash flow was $75.2 million, an increase of $29.6 million from the third quarter of 2024[15] - Adjusted free cash flow for Q3 2025 was $75,224 million, compared to $45,672 million in Q3 2024, marking a growth of 64.7%[48] Subscriber Metrics - The company reported 1,060,000 subscribers at the end of the period, with average revenue per customer increasing to $279[16] - The number of subscribers at the end of Q3 2025 was 1,060,000, a decrease from 1,105,000 in Q3 2024[51] - Average revenue per customer for the last twelve months was $279 in Q3 2025, up from $254 in Q3 2024[51] Operating Expenses and Profitability - Operating expenses decreased to $227,603,000 in Q3 2025 from $232,439,000 in Q3 2024, a reduction of 2.5%[36] - Adjusted EBITDA was $79.4 million, an increase of $9.4 million or 13%, with an adjusted EBITDA margin of 30.5%[11] - Adjusted EBITDA for Q3 2025 was $79,429 million, up from $69,997 million in Q3 2024, indicating a growth of 13.0%[47] - The adjusted EBITDA margin improved to 30.5% in Q3 2025 from 27.9% in Q3 2024[47] Assets and Liabilities - Total assets rose to $1,375,599,000 as of September 30, 2025, compared to $1,309,156,000 at the end of 2024, an increase of 5.1%[38] - Total liabilities decreased slightly to $781,238,000 as of September 30, 2025, from $790,806,000 at the end of 2024[38] - The company reported a decrease in deferred revenue to $211,565,000 as of September 30, 2025, from $225,489,000 at the end of 2024[38] Strategic Developments - The pending merger with Getty Images is ongoing, with the company committed to securing necessary clearances[3][29] - The company will not provide financial guidance due to the pending merger transaction[30] - The company plans to continue focusing on new product development and market expansion strategies[33] Compensation and Depreciation - Total non-cash equity-based compensation for Q3 2025 was $12,962,000, a decrease of 17% from $15,625,000 in Q2 2025[55] - Cost of revenue depreciation for Q3 2025 was $21,028,000, an increase of 1% from $20,804,000 in Q2 2025[56] - General and administrative expenses for equity-based compensation in Q3 2025 were $6,966,000, down 23% from $9,005,000 in Q2 2025[55] - Total depreciation and amortization for Q3 2025 was $22,877,000, an increase of 1% from $22,611,000 in Q2 2025[56] - Product development equity-based compensation for Q3 2025 was $3,370,000, a decrease of 5% from $3,529,000 in Q2 2025[55] - Sales and marketing equity-based compensation for Q3 2025 was $2,098,000, a decrease of 18% from $2,559,000 in Q2 2025[55] - Cost of revenue for equity-based compensation in Q3 2025 was $528,000, a slight decrease from $532,000 in Q2 2025[55] - General and administrative depreciation for Q3 2025 was $1,849,000, an increase of 2% from $1,807,000 in Q2 2025[56] - Total equity-based compensation in Q2 2025 was $15,625,000, compared to $17,884,000 in Q1 2025, indicating a downward trend[55] - Total depreciation and amortization in Q4 2024 was $23,287,000, which is higher than the $22,877,000 reported in Q3 2025[56]

Core Insights - Shutterstock reported a 4% increase in revenue for Q3 2025, reaching $260.1 million, driven by growth in the Data, Distribution, and Services segment [3][15] - The company continues to enhance its value proposition by integrating AI generative models into its content offerings, despite facing a competitive landscape [2] - The pending merger with Getty Images remains a priority, with ongoing engagement with regulatory authorities to secure necessary approvals [2][27] Financial Highlights - Total revenue for Q3 2025 was $260.1 million, an increase of $9.5 million compared to Q3 2024 [3][15] - Content revenue decreased by 5% to $194.4 million, accounting for 75% of total revenue, primarily due to challenges in new customer acquisition [4] - Revenue from Data, Distribution, and Services increased by 40% to $65.7 million, representing 25% of total revenue [5] Profitability Metrics - Net income for Q3 2025 was $13.4 million, down from $17.6 million in Q3 2024, with diluted earnings per share at $0.37 compared to $0.50 [6][15] - Adjusted net income decreased to $36.4 million from $46.4 million year-over-year, with adjusted net income per diluted share at $0.99, down from $1.31 [7][8] - Adjusted EBITDA rose by 13% to $79.4 million, with an adjusted EBITDA margin of 30.5%, up from 27.9% in the previous year [9] Cash Flow and Liquidity - Cash and cash equivalents increased by $49.1 million to $165.5 million as of September 30, 2025, driven by $78.4 million in net cash from operating activities [10][11] - Adjusted free cash flow for Q3 2025 was $75.2 million, an increase of $29.6 million from the same quarter in 2024 [13] Subscriber Metrics - The number of subscribers at the end of Q3 2025 was 1,060,000, unchanged from the previous year [14]

Core Viewpoint - The UK's competition watchdog is set to conduct a detailed investigation into the merger between Getty Images and Shutterstock due to concerns over competition and the remedies proposed by the companies [1] Group 1: Investigation Details - The investigation will focus on the potential impact of the merger on competition within the market for stock images [1] - The competition authority has expressed concerns that the merger could reduce competition and lead to higher prices for consumers [1] Group 2: Company Background - Getty Images is a U.S.-based company that provides stock images, while Shutterstock is a rival in the same industry [1] - Both companies have offered remedies to address competition concerns, but these have not satisfied the competition watchdog [1]

Core Viewpoint - The UK's Competition and Markets Authority (CMA) has referred the proposed merger between Shutterstock and Getty Images to a Phase 2 review process, despite Getty Images offering remedies to avoid this outcome. Shutterstock expresses disappointment but remains committed to the merger and plans to work with the CMA and Getty Images to secure necessary clearances [1]. Company Overview - Shutterstock operates as a platform that transforms ideas into impactful outcomes, leveraging a global network of creators and advanced technology to provide essential resources for businesses and creatives. The company boasts the world's largest and most diverse collection of high-quality licensable assets, data, AI solutions, and full-service studio production [2]. Merger Details - The proposed merger involves significant regulatory scrutiny, as indicated by the CMA's decision to escalate the review process. This development highlights the complexities and challenges associated with large-scale mergers in the creative and media sectors [1][9].

Core Viewpoint - Getty Images is committed to its proposed merger with Shutterstock despite the UK's Competition and Markets Authority referring the merger to a Phase 2 review process, which the company finds disappointing [1] Company Overview - Getty Images is a leading global visual content creator and marketplace, offering a wide range of content solutions to customers worldwide, regardless of their size [2] - The company collaborates with nearly 600,000 content creators and over 355 content partners, covering more than 160,000 news, sports, and entertainment events annually, showcasing its extensive coverage capabilities [2] Technological Advancements - Getty Images enhances customer creativity through its creative library and Custom Content solutions, utilizing generative AI technologies that allow for text-to-image generation, ensuring commercially safe visuals [3]

Core Insights - The 2025 Creative Impact Report indicates a significant increase in global ad spend by 33% since 2023, while the marketing impact has decreased by nearly 20%, highlighting the necessity for improved creative quality and emotional intelligence to drive future growth [1][3][9] Marketing Spend and Impact - Between 2023 and 2024, marketing spend increased by 33%, but its effect on purchase intent only rose by 17%, resulting in a 12% 'impact gap' measured by the Impact Score [1][3] - The cumulative drop in the Impact Score from 2023 through August 2025 is nearly 20%, indicating a worsening trend in marketing effectiveness [1][3] Creative Quality and Emotional Intelligence - The report emphasizes that creative quality, emotional connection, cultural relevance, and AI-driven precision are now more critical than budget size in determining marketing success [3][6] - Companies that align emotional resonance with culturally relevant content and utilize AI for real-time adaptation can effectively close the 20% effectiveness gap [9] Strategies for Improvement - Three key strategies identified for enhancing ROI include leading with emotion, focusing on fewer high-impact messages, and leveraging AI to amplify creativity [4][7] - Campaigns that evoke emotions such as Pride and Belonging achieve believability scores above 61%, while anger drives the highest virality at 42% but can erode trust [7] Industry Trends and Challenges - The report notes that 66% of businesses have faced boycotts related to social movements, with nearly half admitting their creative processes lag behind cultural shifts, making them vulnerable to backlash [5] - The upcoming media landscape in 2026 will be highly competitive, with major events like the Winter Olympics and FIFA World Cup, necessitating brands to communicate with intent rather than volume [6][5] Sector Performance - The report provides insights into sector performance, indicating that the Aerospace and Energy sector saw a +45% Impact Score, while the Consumer sector experienced a -24% decline, the steepest among all sectors [13]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: High-Yielding Stocks in Communication Services - AT&T Inc (NYSE:T) has a dividend yield of 4.34%. The company reported operating revenues of $30.71 billion, a 1.6% increase year-over-year, but below the analyst consensus estimate of $30.87 billion [7] - Comcast Corp (NASDAQ:CMCSA) has a dividend yield of 4.49%. The company appointed Michael J. Cavanagh as co-CEO, effective January 2026 [7] - Shutterstock Inc (NASDAQ:SSTK) has a dividend yield of 5.21%. The company reported better-than-expected second-quarter earnings on July 29 [7]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Company Ratings and Analyst Insights - AT&T Inc (NYSE:T) has a dividend yield of 4.34%. Wells Fargo analyst Eric Luebchow maintained an Overweight rating but reduced the price target from $31 to $29. Goldman Sachs analyst Michael Ng initiated coverage with a Buy rating and a price target of $32 [7] - Comcast Corp (NASDAQ:CMCSA) has a dividend yield of 4.49%. Rosenblatt analyst Barton Crockett maintained a Neutral rating and cut the price target from $38 to $33. Morgan Stanley analyst Benjamin Swinburne maintained an Equal-Weight rating and reduced the price target from $38 to $35 [7] - Shutterstock Inc (NASDAQ:SSTK) has a dividend yield of 5.21%. Needham analyst Bernie McTernan maintained a Buy rating and cut the price target from $30 to $25. JMP Securities analyst Andrew Boone reiterated a Market Perform rating [7] Group 2: Recent Company News - AT&T reported operating revenues of $30.71 billion, a 1.6% increase year-over-year, but below the analyst consensus estimate of $30.87 billion [7] - Comcast appointed Michael J. Cavanagh as co-CEO, effective January 2026 [7] - Shutterstock reported better-than-expected second-quarter earnings on July 29 [7]

Core Thesis - Shutterstock, Inc. (SSTK) is identified as a compelling investment opportunity with a reward-to-risk ratio exceeding 2x, driven by its strong market position and strategic initiatives [2][7]. Revenue Generation - The company derives the majority of its revenue from subscriptions, one-time purchases, and licensing of stock media, controlling over 50% of the market and accounting for approximately 80% of total revenue [2]. Business Transformation - Despite facing long-term challenges in traditional media licensing, Shutterstock is transforming its business model by selling metadata to AI companies and expanding into customized content and advertising solutions [3]. AI Contracts - Contracts with AI companies, including OpenAI, are significant, contributing over $140 million annually and growing at a rate of around 30% per year [4]. Strategic Acquisitions - Recent acquisitions, such as GIPHY in 2021 and Envato in 2024, have diversified Shutterstock's offerings into audio, video, 3D, and enterprise-level creative services, aligning with its revenue target of $1.2 billion and adjusted EBITDA of $350 million by 2027 [5]. Financial Health - The company maintains a solid balance sheet with moderate leverage, stable shares outstanding, and rebounding free cash flow yielding mid-teens percentages post-acquisitions [6]. Merger Potential - The anticipated merger with Getty, expected to close by year-end, could unlock additional value, offering potential all-cash consideration of $28.85 per share, representing an upside of approximately 30% over the next 3-4 months [6]. Risk/Reward Profile - Even in downside scenarios, Shutterstock's stock is supported by strong fundamentals, including a 30% insider ownership stake, nearly 8% dividend yield, and a resilient AI-enhanced business model, presenting an attractive asymmetrical risk/reward profile [7].

Core Viewpoint - Shutterstock has received notice from the UK's Competition and Markets Authority (CMA) regarding their intent to refer the proposed merger with Getty Images to a Phase 2 review unless acceptable undertakings are provided to address competition concerns [1] Company Overview - Shutterstock operates as a global creative platform, providing high-quality creative content and solutions powered by a vast network of creators and advanced technology [2] Merger Details - The proposed merger between Shutterstock and Getty Images is currently under scrutiny by the CMA, which may lead to a more in-depth review process if competition concerns are not adequately addressed [1] - Shutterstock remains committed to the merger and is actively engaging with the CMA and Getty Images to secure necessary clearances [1]