Shutterstock(SSTK) - 2025 Q2 - Quarterly Results

Financial Highlights Shutterstock reported record financial performance in Q2 2025, driven by strong revenue and Adjusted EBITDA growth, significantly boosted by the Envato acquisition Second Quarter 2025 Results Shutterstock reported record Q2 2025 financial performance, with revenue reaching $267.0 million and Adjusted EBITDA growing 32%, primarily driven by the Envato acquisition and data services Q2 2025 vs. Q2 2024 Financial Summary | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $267.0M | $220.1M | +21% | | Net Income | $29.4M | $3.6M | +717% | | Net Income per Diluted Share | $0.82 | $0.10 | +720% | | Adjusted Net Income | $42.9M | $35.9M | +19% | | Adjusted Net Income per Diluted Share | $1.19 | $1.00 | +19% | | Adjusted EBITDA | $82.2M | $62.1M | +32% | - Revenue growth was broad-based, with content revenue increasing by 18% to $199.8 million due to the Envato acquisition, and Data, Distribution, and Services revenue growing by 34% to $67.2 million from data deal recognition[4][5] - The significant increase in net income was attributed to profitability from the Envato acquisition and unrealized gains from the company's investment in Meitu, Inc, partially offset by a $3.7 million increase in interest expense and $8.7 million in professional fees for the proposed merger with Getty Images[6] - Adjusted EBITDA margin improved to 30.8% in Q2 2025, up from 28.2% in Q2 2024, primarily due to contributions from Envato and data deal revenue[10] Liquidity and Capital Resources The company's liquidity saw a modest increase in Q2 2025, driven by operating cash flow despite significant investing and financing activities Second Quarter Liquidity Cash and cash equivalents increased by $4.2 million to $116.4 million in Q2 2025, primarily from operations, partially offset by investing and financing outflows - Cash and cash equivalents rose to $116.4 million as of June 30, 2025, an increase of $4.2 million during the quarter[11] - Cash from operations was unfavorably impacted by $5.7 million in expenses related to the proposed merger with Getty Images[12] - Financing activities included an $11.6 million dividend payment and a $0.8 million repayment of the credit facility[14] - Adjusted free cash flow decreased by $18.7 million year-over-year to $17.5 million for Q2 2025[14] Quarterly Cash Dividend The company maintained its commitment to shareholder returns by paying a $0.33 per common share dividend in Q2 2025 and declaring an identical dividend for September 2025 - In Q2 2025, the company paid a cash dividend of $0.33 per share, amounting to a total of $11.6 million[15] - The Board of Directors declared a further dividend of $0.33 per share, payable on September 18, 2025[15] Key Operating Metrics Envato's integration significantly impacted Q2 2025 operating metrics, doubling subscribers and surging paid downloads, though average revenue per customer decreased Key Operating Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Subscribers (end of period) | 1,073,000 | 490,000 | +119% | | Subscriber revenue | $108.0M | $80.3M | +34.5% | | Average revenue per customer (LTM) | $266 | $434 | -38.7% | | Paid downloads | 112.6M | 33.4M | +237% | - The metrics for 2025 include counts and revenues from Envato, acquired in July 2024, leading to significant year-over-year changes in subscriber and download figures[16] Merger with Getty Images Shutterstock is proceeding with its merger of equals with Getty Images, approved by stockholders, with completion contingent on regulatory approvals - On January 7, 2025, Shutterstock entered into a merger agreement with Getty Images for a merger of equals[29] - A majority of Shutterstock stockholders approved the merger agreement at a special meeting on June 10, 2025[29] - Due to the pending transaction, Shutterstock will not host a conference call or provide financial guidance for Q2 2025[30] Non-GAAP Financial Measures The company utilizes non-GAAP financial measures to provide a clearer understanding of core operational performance by excluding certain non-cash and one-time items - The company uses non-GAAP financial measures such as adjusted EBITDA, adjusted net income, adjusted free cash flow, and constant currency revenue growth[21] - Management believes these measures help investors analyze operating results on the same basis as management by eliminating the effects of unusual or infrequent charges not attributable to underlying performance[25] - Key adjustments to derive non-GAAP figures include depreciation and amortization, non-cash equity-based compensation, merger-related costs, and unrealized gains/losses on investments[22] Consolidated Financial Statements This section presents Shutterstock's consolidated financial statements, including detailed statements of operations, balance sheets, and cash flows Consolidated Statements of Operations For Q2 2025, Shutterstock's revenue increased to $267.0 million, with net income surging to $29.4 million ($0.82 per diluted share), driven by higher revenue and other income Consolidated Statements of Operations (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $266,990 | $220,053 | | Income from operations | $34,731 | $20,666 | | Net income | $29,440 | $3,625 | | Diluted EPS | $0.82 | $0.10 | Consolidated Balance Sheets As of June 30, 2025, Shutterstock's total assets increased to $1.376 billion, primarily in current assets, leading to higher stockholders' equity while total liabilities remained stable Consolidated Balance Sheet Summary | (In thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $308,706 | $255,958 | | Total assets | $1,376,451 | $1,309,156 | | Total current liabilities | $634,303 | $625,286 | | Total liabilities | $790,288 | $790,806 | | Total stockholders' equity | $586,163 | $518,350 | Consolidated Statements of Cash Flows In Q2 2025, the company generated $26.8 million in cash from operating activities, with overall cash and cash equivalents increasing by $4.2 million despite investing and financing outflows Consolidated Cash Flow Summary (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,836 | $27,965 | | Net cash (used in) / provided by investing activities | $(14,965) | $8,301 | | Net cash used in financing activities | $(13,878) | $(32,149) | | Net increase in cash and cash equivalents | $4,179 | $3,060 | Reconciliation of Non-GAAP Financial Information to GAAP This section provides detailed reconciliations from GAAP to non-GAAP metrics, including Adjusted Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow, for Q2 2025 Q2 2025 Reconciliation of Net Income to Adjusted Net Income | (In thousands) | Amount | | :--- | :--- | | Net income (GAAP) | $29,440 | | Non-cash equity-based compensation | $15,625 | | Acquisition-related amortization expense | $9,581 | | Merger related costs | $8,710 | | Other (incl. unrealized gains) | $(17,908) | | Tax effects of adjustments | $(7,514) | | Adjusted net income (Non-GAAP) | $42,872 | Q2 2025 Reconciliation of Net Income to Adjusted EBITDA | (In thousands) | Amount | | :--- | :--- | | Net income (GAAP) | $29,440 | | Interest, Taxes, Depreciation & Amortization | $40,526 | | EBITDA | $68,889 | | Non-cash equity-based compensation | $15,625 | | Merger related costs | $8,710 | | Unrealized gain on investment | $(18,029) | | Other adjustments | $7,041 | | Adjusted EBITDA (Non-GAAP) | $82,236 | Q2 2025 Adjusted Free Cash Flow Calculation | (In thousands) | Amount | | :--- | :--- | | Net cash provided by operating activities | $26,836 | | Capital expenditures | $(11,312) | | Content acquisitions | $(4,081) | | Merger related costs (cash paid) | $5,686 | | Other adjustments | $369 | | Adjusted Free Cash Flow | $17,498 | Supplemental Financial Data This section provides historical quarterly data, highlighting operational trends and expense allocations, with Envato's inclusion significantly increasing subscribers and paid downloads from Q1 2025 - Historical operating metrics show a significant increase in subscribers (from 459k in Q4'24 to 1,079k in Q1'25) and paid downloads (from 33.0 million in Q4'24 to 120.9 million in Q1'25), coinciding with the inclusion of Envato's results[51] Total Non-Cash Equity-Based Compensation (Quarterly) | ($ in thousands) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | $15,625 | $17,884 | $15,110 | $15,094 | $14,976 | Total Depreciation and Amortization (Quarterly) | ($ in thousands) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | $22,611 | $22,671 | $23,287 | $21,644 | $21,433 |