Core Insights - Shutterstock achieved record levels in both revenue and adjusted EBITDA for the second quarter of 2025, driven by a comprehensive suite of offerings including creative content and AI solutions [2][3]. Financial Highlights - Revenue for the second quarter of 2025 was $267.0 million, an increase of $46.9 million or 21% compared to the second quarter of 2024 [3][14]. - Content product revenue increased by $29.8 million, or 18%, to $199.8 million, representing 75% of total revenue [3][14]. - Revenue from Data, Distribution, and Services rose by $17.1 million, or 34%, to $67.2 million, accounting for 25% of total revenue [4][14]. Net Income and Earnings - Net income for the second quarter of 2025 was $29.4 million, up from $3.6 million in the same period of 2024, with net income per diluted share increasing to $0.82 from $0.10 [5][14]. - Adjusted net income rose to $42.9 million, an increase of $7.0 million compared to $35.9 million in the second quarter of 2024, with adjusted net income per diluted share at $1.19, up from $1.00 [6][7][14]. Adjusted EBITDA - Adjusted EBITDA for the second quarter of 2025 was $82.2 million, a 32% increase from $62.1 million in the second quarter of 2024, with an adjusted EBITDA margin of 30.8% [8][14]. Liquidity and Cash Flow - Cash and cash equivalents increased by $4.2 million to $116.4 million as of June 30, 2025, driven by $26.8 million of net cash from operating activities [9][10]. - Adjusted free cash flow was $17.5 million for the second quarter of 2025, a decrease of $18.7 million from the same period in 2024 [12][14]. Subscriber Metrics - Subscribers at the end of the period reached 1,073,000, up from 490,000 in the previous year [16][43]. - Subscriber revenue for the second quarter was $108.0 million, compared to $80.3 million in the same period of 2024 [16][43]. Merger Activity - The company is in the process of a merger with Getty Images, which was approved by a majority of Shutterstock stockholders [28][29].

Company Overview - Shutterstock (SSTK) shares increased by 9.3% to $20.83 in the last trading session, with a higher-than-average trading volume, contrasting with a 1% gain over the past four weeks [1] - The company is experiencing growth due to an expanding clientele and the acquisition of Envato, alongside strong demand for AI-generated content [2] Financial Performance - Shutterstock is expected to report quarterly earnings of $1.65 per share, reflecting a year-over-year increase of 65%, with revenues projected at $274.77 million, up 24.9% from the previous year [3] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [4] Industry Context - Shutterstock operates within the Zacks Internet - Content industry, where Genius Sports Limited (GENI) also resides, having closed 2.9% higher at $10.96, with a 5.7% return over the past month [4] - Genius Sports Limited's consensus EPS estimate has increased by 156.5% over the past month, indicating a significant change compared to the previous year's EPS [5]

Group 1 - Shutterstock has approved the merger with Getty Images by a significant margin, indicating strong support for the deal [1] - The merger is expected to close in the second quarter, providing a premium to current stock prices [1] Group 2 - The article highlights the author's extensive experience in investment analysis, focusing on identifying underappreciated companies [1]

Core Perspective - Shutterstock is redefining its brand identity and offerings to enhance its role in the creative industry, focusing on AI-powered solutions to empower businesses and creatives [1][4][8] Company Overview - Shutterstock has over two decades of experience supporting creative successes across various industries, including entertainment, tech, finance, and healthcare [4] - The company aims to provide scalable creative and generative AI solutions to meet modern storytelling demands [1][4] New Offerings - The company has launched an Unlimited downloads subscription, allowing individual users access to unlimited downloads from a library of over 80 million high-quality images, videos, and audio content [5] - Generative AI Pro is a new offering designed for business use, enabling the creation of high-quality visuals at 4K resolution, enhancing creative variety and brand relevance [5][6] AI and Data Solutions - Shutterstock's AI offerings include a proprietary Model Recommender that selects the best-fit model for each prompt, ensuring higher quality results [6] - The company provides one of the largest rights-cleared multimodal datasets for AI model builders, evolving with content refreshes and new asset types [10] Creative Production and Distribution - Shutterstock Studios offers a streamlined, end-to-end creative production model, leveraging advanced production tools to meet the content needs of major marketers [10] - GIPHY Ads expands Shutterstock's capabilities in creative content distribution, connecting brands with customers through engaging ads [10] Strategic Developments - The rebrand coincides with a merger agreement between Shutterstock and Getty Images, aimed at creating a premier visual content company [9]

Core Points - Shutterstock's stockholders approved the merger agreement with Getty Images, with approximately 82% of the shares voting in favor [1][2][3] - The merger aims to create a premier visual content company, enhancing capabilities in content creation, event coverage, and technology innovation [2][3] - The transaction is expected to close in the second half of 2025, pending regulatory approvals and customary conditions [3] Company Overview - Shutterstock is a leading global creative platform providing high-quality creative content for brands, digital media, and marketing companies [5] - The platform is supported by millions of creators and offers a diverse collection of 3D models, videos, music, photographs, vectors, and illustrations [5] - Shutterstock aims to deliver exceptional value to partners, contributors, and stockholders through its innovative technology and comprehensive resources [5]

Core Insights - The performance of Shutterstock's international operations is crucial for understanding its financial strength and growth potential [1][2] - The company's total revenue for the quarter ending March 2025 was $242.62 million, reflecting a year-over-year increase of 13.2% [4] International Revenue Breakdown - Europe generated $66.18 million in revenue, accounting for 27.28% of total revenue, which was a surprise of -4.6% compared to the consensus estimate of $69.37 million [5] - The Rest of the World contributed $56.23 million, representing 23.18% of total revenue, with a surprise of -7.65% against the expected $60.89 million [6] Future Revenue Predictions - Analysts project Shutterstock's revenues for the ongoing fiscal quarter to reach $274.77 million, a 24.9% increase from the previous year, with Europe and Rest of the World expected to contribute $67.89 million and $59.41 million, respectively [7] - For the full year, total revenue is anticipated to be $1.07 billion, indicating a 14.3% increase from the prior year, with Europe and Rest of the World expected to account for $284.63 million and $249.66 million, respectively [8] Market Dependency and Trends - Shutterstock's reliance on global markets for revenue presents both opportunities and risks, making the monitoring of international revenue trends essential for predicting future performance [9] - The increasing global interconnections and geopolitical tensions are factors that analysts consider when adjusting earnings predictions for companies with international operations [10] Stock Performance - Over the past month, Shutterstock's stock has increased by 30.6%, outperforming the Zacks S&P 500 composite's 9.1% rise [12] - In contrast, the company's shares have declined by 31% over the past three months, while the S&P 500 has only seen a 3.1% decline [12]

Core Viewpoint - Shutterstock reported quarterly earnings of $1.03 per share, missing the Zacks Consensus Estimate of $1.26 per share, and down from $1.13 per share a year ago [1][2] Financial Performance - The earnings surprise was -18.25%, and the company had a previous quarter surprise of -27.17% with actual earnings of $0.67 per share against an expectation of $0.92 [2] - Revenues for the quarter were $242.62 million, missing the Zacks Consensus Estimate by 8%, compared to $214.32 million in the same quarter last year [3] - Over the last four quarters, the company has surpassed consensus revenue estimates twice [3] Stock Performance - Shutterstock shares have declined approximately 45.9% since the beginning of the year, while the S&P 500 has decreased by 4.7% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.65 on revenues of $274.77 million, and for the current fiscal year, it is $5.39 on revenues of $1.07 billion [8] - The outlook for the industry, specifically the Internet - Content sector, is in the bottom 31% of over 250 Zacks industries, which may impact stock performance [9]

Financial Performance - Revenue for Q1 2025 was $242.62 million, a 13.2% increase from $214.32 million in Q1 2024[16] - Net income for Q1 2025 was $18.69 million, compared to $16.12 million in Q1 2024, representing a 15.9% increase[16] - Earnings per share (EPS) for Q1 2025 were $0.54 (basic) and $0.53 (diluted), up from $0.45 (both) in Q1 2024[16] - Total revenue for the three months ended March 31, 2025, was $242.62 million, a 13.2% increase from $214.32 million in the same period of 2024[240] - Content revenue increased to $202.9 million in Q1 2025 from $173.8 million in Q1 2024, representing a 16.7% growth[112] - Net income for the three months ended March 31, 2025, was $18.7 million, compared to $16.1 million in Q1 2024, reflecting a 16.3% increase[121] - Basic net income per share rose to $0.54 in Q1 2025 from $0.45 in Q1 2024, while diluted net income per share increased to $0.53 from $0.45[121] - Total other income for Q1 2025 was $14.5 million, significantly higher than $4.2 million in Q1 2024, driven by increased interest income and unrealized gains[113] Assets and Liabilities - Total assets increased to $1.32 billion as of March 31, 2025, compared to $1.31 billion at the end of 2024[14] - Total liabilities decreased to $777.04 million as of March 31, 2025, from $790.81 million at the end of 2024[14] - Cash and cash equivalents at the end of the period were $112.231 million, up from $71.811 million at the end of the same period last year[24] - The company had total long-lived tangible assets of $65.6 million as of March 31, 2025, slightly down from $66.4 million at the end of 2024[127] - As of March 31, 2025, the company had approximately $40.4 million in total other non-lease obligations, primarily related to minimum royalty guarantees[128] Cash Flow and Dividends - Cash dividends paid in Q1 2025 amounted to $11.50 million, compared to $10.66 million in Q1 2024[21] - The company paid cash dividends totaling $11.501 million during the three months ended March 31, 2025, compared to $10.663 million in the same period of 2024[24] - The company experienced a net increase in cash and cash equivalents of $0.980 million for the three months ended March 31, 2025, compared to a decrease of $28.679 million in the same period of 2024[24] Mergers and Acquisitions - The company plans to continue its proposed merger with Getty Images Holdings, Inc., which may impact future financial performance[10] - The company has entered into a merger agreement with Getty Images, with a cash consideration of $9.50 per share and 9.17 shares of Getty Images common stock for each share of Shutterstock common stock[33] - The Company completed the acquisition of Envato for $250.2 million on July 22, 2024, which is expected to enhance its offerings and reach faster-growing audiences[65][66] - The acquisition of Backgrid was completed for approximately $20 million on February 1, 2024, expanding Shutterstock's editorial content offerings[68][69] - The Company incurred approximately $7.0 million in transaction costs related to the Envato acquisition, included in general and administrative expenses[65] Expenses and Costs - Operating expenses for Q1 2025 totaled $232.42 million, an increase from $197.57 million in Q1 2024[16] - The company recorded a bad debt expense of $0.593 million for the three months ended March 31, 2025, compared to a recovery of $1.510 million in the same period of 2024[24] - Depreciation and amortization expense for property and equipment was $10.6 million for the three months ended March 31, 2025, compared to $10.3 million for the same period in 2024[77] - Amortization expense for the three months ended March 31, 2025, was $12.1 million, an increase from $11.0 million in the same period of 2024[84] Revenue Sources - Revenue from U.S. dollars amounted to $177.11 million, up from $153.53 million, reflecting a growth of 15.4% year-over-year[240] - Total foreign currency revenue reached $65.51 million, compared to $60.78 million, indicating an increase of 7.1%[240] - Revenue from Euro was $38.12 million, a rise of 6.8% from $35.85 million in the previous year[240] - Revenue from British pounds increased to $14.70 million, up 25.5% from $11.68 million[240] Tax and Interest - The effective tax rate for Q1 2025 was 8.5%, down from 20.9% in Q1 2024, primarily due to the net effect of discrete items[114] - The company recognized interest expense of $4.3 million for the three months ended March 31, 2025[96] - The interest rate on borrowed amounts ranges from 0.375% to 0.750% based on the company's consolidated net leverage ratio[242] Market and Economic Conditions - The company does not expect a material impact on interest expense from a hypothetical 10% change in interest rates as of March 31, 2025[242] - The company believes inflation has not materially affected its business or financial condition[243] - The company aims to preserve principal while maximizing income through its cash and cash equivalents[241] - The company may face challenges in offsetting significant inflationary pressures through price increases[243] Other Financial Metrics - Total accrued expenses decreased to $107.88 million as of March 31, 2025, from $126.64 million as of December 31, 2024[87] - The company had a remaining borrowing capacity of $94 million under its amended and restated credit agreement as of March 31, 2025[91] - As of March 31, 2025, the company had $53.8 million in unbilled receivables, with $34.4 million recorded in accounts receivable[45] - The allowance for doubtful accounts increased to approximately $3.6 million as of March 31, 2025, from $3.1 million as of December 31, 2024[46] - The identifiable intangible assets from the Envato acquisition include trademarks valued at $31.0 million and developed technology valued at $61.0 million[67]

Financial Performance - First quarter 2025 revenue was $242.6 million, an increase of $28.3 million or 13% compared to the first quarter of 2024[4] - Content revenue grew by $29.1 million, or 17%, to $202.9 million, representing 84% of total revenue[4] - Net income for the first quarter of 2025 was $18.7 million, up $2.6 million from $16.1 million in the same period last year[6] - Adjusted net income increased to $36.3 million, a rise of $3.2 million compared to $33.1 million in the first quarter of 2024[8] - Adjusted EBITDA for the first quarter of 2025 was $63.4 million, reflecting a 13% increase from $56.0 million in the prior year[10] - Subscriber revenue for the first quarter was $109.9 million, compared to $83.9 million in the same period last year[16] - Net income for Q1 2025 was $18.69 million, compared to $16.12 million in Q1 2024, reflecting a 15.9% year-over-year growth[39] - Basic earnings per share increased to $0.54 in Q1 2025 from $0.45 in Q1 2024, while diluted earnings per share rose from $0.45 to $0.53[39] - Adjusted free cash flow was $23.4 million, an increase of $12.1 million from the first quarter of 2024[14] Subscriber Growth - The number of subscribers at the end of the first quarter 2025 reached 1,079,000, a significant increase from 499,000 in the previous year[16] - The number of subscribers at the end of March 31, 2025, reached 1,079,000, up from 523,000 at the end of March 31, 2024[53] Expenses and Liabilities - Operating expenses totaled $232.42 million in Q1 2025, up from $197.57 million in Q1 2024, with a notable increase in general and administrative expenses from $32.08 million to $58.31 million[39] - Total liabilities decreased to $777.04 million from $790.81 million, reflecting a reduction in current liabilities[41] - The company incurred $11.9 million in professional fees related to the proposed merger with Getty Images[6] - The company incurred merger-related costs of $11,861,000 during the three months ended March 31, 2025[49] Merger and Acquisition - Shutterstock announced a merger agreement with Getty Images, creating a premier visual content company, subject to regulatory approvals[28] - The company is in the process of a proposed acquisition of Getty Images, with relevant documents filed with the SEC[32][33] - Forward-looking statements indicate potential risks related to regulatory approvals and integration challenges associated with the acquisition[36] Asset Management - Total assets as of March 31, 2025, were $1.32 billion, up from $1.31 billion at the end of 2024[41] - Cash and cash equivalents increased slightly to $112.23 million from $111.25 million[41] - Accounts receivable rose to $111.74 million, compared to $95.23 million at the end of 2024, indicating improved sales performance[41] Depreciation and Amortization - Total depreciation and amortization for the three months ended March 31, 2025, was $22,671,000, a decrease of 2.6% from $23,287,000 in the previous quarter[58] - Cost of revenue depreciation was $20,742,000 for the quarter, down from $21,191,000 in the prior quarter, reflecting a decrease of 2.1%[58] - General and administrative depreciation increased to $1,929,000, compared to $2,096,000 in the previous quarter, a decrease of 8.0%[58] - Year-over-year comparison shows total depreciation and amortization increased from $21,263,000 in Q1 2024 to $22,671,000 in Q1 2025, representing a growth of 6.6%[58] - The cost of revenue depreciation has shown a consistent increase from $19,874,000 in Q1 2024 to $20,742,000 in Q1 2025, indicating a growth of 4.4%[58] - General and administrative expenses have fluctuated, with a notable increase from $1,346,000 in Q2 2024 to $1,929,000 in Q1 2025, marking a significant rise of 43.2%[58] - The overall trend indicates a gradual increase in depreciation and amortization expenses, which may impact future profitability metrics[58] - The data suggests that the company is managing its depreciation expenses effectively while still investing in growth[58]

Core Insights - Shutterstock reported strong financial performance in Q1 2025, with a 13% increase in total revenue year-over-year, reaching $242.6 million [3][11] - Content revenue grew by 17% to $202.9 million, accounting for 84% of total revenue, while revenue from Data, Distribution, and Services decreased by 2% to $39.7 million [3][4][11] - The company achieved a net income of $18.7 million, up from $16.1 million in Q1 2024, with diluted earnings per share increasing to $0.53 from $0.45 [5][11] Financial Highlights - Total revenue for Q1 2025 was $242.6 million, an increase of $28.3 million compared to Q1 2024 [3][11] - Content revenue increased by $29.1 million, or 17%, to $202.9 million, while Data, Distribution, and Services revenue decreased by $0.8 million, or 2%, to $39.7 million [3][4] - Net income rose to $18.7 million, with adjusted net income increasing to $36.3 million, reflecting a $3.2 million increase from the previous year [5][6][11] Adjusted Metrics - Adjusted EBITDA for Q1 2025 was $63.4 million, a 13% increase from $56.0 million in Q1 2024, maintaining an adjusted EBITDA margin of 26.1% [8][11] - Adjusted net income per diluted common share was $1.03, up from $0.92 in Q1 2024 [7][11] Cash Flow and Liquidity - Cash and cash equivalents increased to $112.2 million as of March 31, 2025, driven by $25.2 million in net cash from operating activities [9][11] - Adjusted free cash flow for Q1 2025 was $23.4 million, an increase of $12.1 million from Q1 2024 [13][11] Subscriber Metrics - The number of subscribers reached 1,079,000, significantly up from 499,000 in Q1 2024 [15][11] - Subscriber revenue increased to $109.9 million, with an average revenue per customer of $244 [15][11] Merger Activity - Shutterstock is in the process of merging with Getty Images, which is expected to create a leading visual content company [24][25]