Shutterstock Reports Full Year 2023 and Fourth Quarter Financial Results
- Record revenues and profitability achieved in 2023, surpassing targets set at the beginning of the year.
- Revenue increased by 6% to $874.6 million for the full year 2023.
- Net income rose by 45% to $110.3 million for the full year 2023.
- Adjusted EBITDA increased by 10% to $240.8 million for the full year 2023.
- Shutterstock sets long-term financial targets for 2027, focusing on revenue growth and EBITDA margin expansion.
- Despite overall positive results, the fourth quarter of 2023 saw a decrease in revenues and key financial metrics.
- Investments in Data, Distribution, and Services are highlighted as growth opportunities for the company.
- Fourth quarter 2023 saw a decrease in revenues and key financial metrics compared to the same period in 2022.
- Operating cash flows decreased by $27.2 million in the fourth quarter of 2023.
- Adjusted EBITDA decreased by 21% to $46.3 million in the fourth quarter of 2023.
- Net loss of $1.0 million was reported in the fourth quarter of 2023.
- Free cash flow decreased by $3.6 million in the fourth quarter of 2023.
Insights
Shutterstock's announcement of record revenues and profitability for the full year 2023, with a 6% revenue increase to $874.6 million, is a reflection of the company's strategic growth in its Data, Distribution and Services segment. This segment's 256% revenue surge, driven by the Giphy acquisition, indicates a successful pivot towards diversifying revenue streams beyond traditional content offerings. However, the decline in Content revenue by 7% signals potential challenges in the core business, likely due to weakened new customer acquisition.
From an investment standpoint, the 45% increase in net income to $110.3 million and a 46% rise in net income per diluted share to $3.04 are strong indicators of profitability growth. Yet, the full year's operating cash flows decreased by $17.9 million, suggesting that there might be underlying issues in cash management or operational efficiency. The increased free cash flow of $40.1 million to $138.5 million, however, provides a more positive outlook on the company's liquidity and its ability to fund investments or return capital to shareholders.
Analyzing Shutterstock's performance within the context of the broader stock image and digital content industry, the company's strategic investments in Data, Distribution and Services appear to be paying off, as evidenced by the significant revenue growth in this segment. The move to provide revenue breakouts across two categories - Content and Data, Distribution and Services - could offer investors more transparency into the company's revenue drivers and potential growth areas.
However, the stagnation in fourth-quarter revenue and the decrease in net income and adjusted EBITDA highlight the volatility and competitive pressures in the industry. The company's long-term financial targets through 2027, including a revenue growth CAGR of 10% and EBITDA margin expansion from 28% to 30%, will require careful navigation of these market dynamics. The 2024 guidance suggests stability, with revenue and adjusted EBITDA expected to remain unchanged from 2023, potentially indicating a cautious outlook for the upcoming year.
Shutterstock's financial performance can be partially attributed to macroeconomic factors such as currency fluctuations, as indicated by the constant currency revenue increase. The company's ability to generate growth in a potentially inflationary environment, where discretionary spending on marketing and advertising could be under pressure, is noteworthy. The acquisition of Giphy and its integration into Shutterstock's portfolio may be seen as a strategic move to bolster the company's competitive position in a market that is increasingly valuing data and services alongside traditional content.
The company's future revenue and profit trajectories, as outlined in the 2027 long-term financial targets, suggest confidence in its business model and growth strategy. However, the economic landscape, including currency risks, competition and changing consumer behavior, will continue to pose challenges that Shutterstock will need to navigate to achieve these goals.
Commenting on the Company's performance, Paul Hennessy, the Company's Chief Executive Officer, said, "Shutterstock delivered record revenues and profitability in 2023 and significantly exceeded our targets set out at the beginning of the year.
Our success in building a leading content platform has allowed us to make key investments in Data, Distribution and Services where we have an exciting growth opportunity supported by strong industry tailwinds and a large TAM. Going forward, we'll be shining a light on these exciting growth businesses, and providing revenue breakouts across two categories – Content and Data, Distribution and Services. As part of today's release, we are also pleased to announce Shutterstock's 2027 long-term financial targets."
Full Year 2023 highlights as compared to Full Year 2022:
Financial Highlights
- Revenue increased
6% to$874.6 million 5% . - Income from operations decreased
27% to$68.4 million - Net income increased
45% to$110.3 million - Adjusted EBITDA increased
10% to$240.8 million - Net income per diluted share increased
46% to$3.04 - Adjusted net income per diluted share increased
12% to$4.35 - Operating cash flows decreased
$17.9 million $140.6 million - Free cash flow increased
$40.1 million $138.5 million
Fourth Quarter 2023 highlights as compared to Fourth Quarter 2022:
Financial Highlights
- Revenues decreased
$0.5 million $217.2 million - Income from operations decreased
72% to$2.1 million - Net income / (loss) decreased
114% to a$1.0 million - Adjusted EBITDA decreased
21% to$46.3 million - Net income per diluted share decreased
$0.22 $(0.03) - Adjusted net income per diluted share decreased
$0.33 $0.72 - Operating cash flows decreased
$27.2 million $33.9 million - Free cash flow decreased
$3.6 million $41.6 million
FULL YEAR RESULTS
Revenue
Full year revenue of
Revenue generated through our Content product offering decreased
On a constant currency basis, revenue increased
Net income and Income per diluted share
Net income of
Adjusted net income per diluted share, which excludes the bargain purchase in 2023 and the impairment of lease and related assets in 2022, was
Adjusted EBITDA
Adjusted EBITDA of
Adjusted EBITDA margin of
FOURTH QUARTER RESULTS
Revenue
Fourth quarter revenue was
Revenue from our Content product offering decreased
Revenues were not impacted on a constant currency basis in the fourth quarter of 2023 as compared to the fourth quarter of 2022.
Net income and net income per diluted share
The net loss in fourth quarter of
Fourth quarter 2023 net loss was unfavorably impacted by expenses associated with reimbursable costs paid to the Giphy workforce in addition to increased marketing expenses.
Adjusted net income per diluted share was
Adjusted EBITDA
Adjusted EBITDA of
LIQUIDITY
For the full year 2023, our cash and cash equivalents decreased by
Cash used in investing activities primarily consisted of capital expenditures of
Cash used in financing activities primarily consisted of (i)
Free cash flow was
QUARTERLY CASH DIVIDEND
During the three months ended December 31, 2023, the Company declared and paid a cash dividend of
On January 29, 2024, the Board of Directors declared a dividend of
KEY OPERATING METRICS
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Subscribers (end of period)(1) | 523,000 | 586,000 | 523,000 | 586,000 | ||||
Subscriber revenue (in millions)(2) | $ 85.2 | $ 88.8 | $ 351.5 | $ 346.6 | ||||
Average revenue per customer (last twelve months)(3) | $ 412 | $ 341 | $ 412 | $ 341 | ||||
Paid downloads (in millions)(4) | 35.4 | 42.5 | 153.0 | 173.3 | ||||
Revenue per download(5) | $ 5.02 | $ 4.49 | $ 4.72 | $ 4.40 | ||||
Content in our collection (end of period, in millions)(6): | ||||||||
Images | 771 | 719 | 771 | 719 | ||||
Footage clips | 54 | 47 | 54 | 47 | ||||
____________________________________________________________________________ |
Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from TurboSquid beginning February 2022, from PicMonkey beginning September 2022, and from Pond5 and Splash News beginning May 2023. These metrics exclude the respective counts and revenues from Giphy. |
(1) Subscribers is defined as those customers who purchase one or more of our monthly recurring products for a continuous period of at least three months, measured as of the end of the reporting period. |
(2) Subscriber revenue is defined as the revenue generated from subscribers during the period. |
(3) Average revenue per customer is calculated by dividing total revenue for the last twelve-month period by customers. Customers is defined as total active, paying customers that contributed to total revenue over the last twelve-month period. |
(4) Paid downloads is the number of downloads that our customers make in a given period of our content. Paid downloads exclude content related to our Studios business, downloads of content that are offered to customers for no charge, including our free trials and downloads associated with our computer vision offering. |
(5) Revenue per download is the amount of revenue recognized in a given period divided by the number of paid downloads in that period excluding revenue from our Studios business, revenue that is not derived from or associated with content licenses and revenue associated with our computer vision offering. |
(6) Content in our collection represents approved images (photographs, vectors and illustrations) and footage (in number of clips) in our library at the end of the period. This metric excludes content that is not uploaded directly to our site but is available for license by our customers through an application program interface, content from our Studios business and AI generated content. Prior to December 31, 2022, this metric only included approved images and footage clips in our library on shutterstock.com at the end of the period. |
2027 LONG TERM TARGETS
Details of our 2027 Long Term Targets may be found below and in our investor presentation titled "Shutterstock 2027: Long-range Financial Targets," available at https://investor.shutterstock.com/.
- Revenue growth CAGR of
10% and 2027 revenues of$1.2 billion - Content revenue growth CAGR of
7% and Data, Distribution, and Services revenue growth CAGR of22% . - EBITDA margin expansion from
28% to30% and 2027 EBITDA of$350 million - Cumulative Free Cash Flow of
$800 million
2024 GUIDANCE
The Company increased its guidance for the full year 2024, to the following:
- Revenue of
$875 million $241 million - Adjusted net income per diluted share of between
$4.15 $4.30
NON-GAAP FINANCIAL MEASURES
To supplement Shutterstock's consolidated financial statements presented in accordance with the accounting principles generally accepted in
Shutterstock defines adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, foreign currency transaction gains and losses, severance costs associated with strategic workforce optimizations, interest income and expense and income taxes; adjusted EBITDA margin as the ratio of adjusted EBITDA to revenue; adjusted net income as net income adjusted for the impact of non-cash equity-based compensation, amortization of acquisition-related intangible assets, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, severance costs associated with strategic workforce optimizations and the estimated tax impact of such adjustments; adjusted net income per diluted share as adjusted net income divided by weighted average diluted shares; revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage) as the increase in current period revenues over prior period revenues, utilizing fixed exchange rates for translating foreign currency revenues for all periods in the comparison; billings as revenue adjusted for the change in deferred revenue, excluding deferred revenue acquired through business combinations; and free cash flow as cash provided by operating activities, adjusted for capital expenditures, content acquisition and cash received related to Giphy Retention Compensation in connection with the acquisition of Giphy.
The expense associated with the Giphy Retention Compensation related to (i) the one-time employment inducement bonuses and (ii) the vesting of the cash value of unvested Meta equity awards held by the employees prior to closing, which are reflected in operating expenses (together, the "Giphy Retention Compensation Expense - non-recurring"), are required payments in accordance with the terms of the acquisition. Meta's sale of Giphy was directed by the CMA and accordingly, the terms of the acquisition were subject to CMA preapproval. Management considers the operating expense associated with these required payments to be unusual and non-recurring in nature. The Giphy Retention Compensation Expense - non-recurring is not considered an ongoing expense necessary to operate the Company's business. Therefore, such expenses have been included in the below adjustments for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted common share. For the three months ended December 31, 2023, the Company also incurred
These figures have not been calculated in accordance with GAAP and should be considered only in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. Shutterstock cautions investors that non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies.
Shutterstock's management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per diluted share, revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage), billings and free cash flow are useful to investors because these measures enable investors to analyze Shutterstock's operating results on the same basis as that used by management. Additionally, management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted share provide useful information to investors about the performance of the Company's overall business because such measures eliminate the effects of unusual or other infrequent charges that are not directly attributable to Shutterstock's underlying operating performance; and revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage) provides useful information to investors by eliminating the effect of foreign currency fluctuations that are not directly attributable to Shutterstock's operating performance. Management also believes that providing these non-GAAP financial measures enhances the comparability for investors in assessing Shutterstock's financial reporting. Shutterstock's management believes that free cash flow is useful for investors because it provides them with an important perspective on the cash available for strategic measures, after making necessary capital investments in internal-use software and website development costs to support the Company's ongoing business operations and provides them with the same measures that management uses as the basis for making resource allocation decisions.
Shutterstock's management also uses the non-GAAP financial measures adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per diluted share, revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage), billings and free cash flow, in conjunction with GAAP financial measures, as an integral part of managing the business and to, among other things: (i) monitor and evaluate the performance of Shutterstock's business operations, financial performance and overall liquidity; (ii) facilitate management's internal comparisons of the historical operating performance of its business operations; (iii) facilitate management's external comparisons of the results of its overall business to the historical operating performance of other companies that may have different capital structures and debt levels; (iv) review and assess the operating performance of Shutterstock's management team and, together with other operational objectives, as a measure in evaluating employee compensation and bonuses; (v) analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (vi) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments.
Reconciliations of the differences between adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per diluted share, revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage), billings, free cash flow, and the most comparable financial measures calculated and presented in accordance with GAAP, are presented under the headings "Reconciliation of Non-GAAP Financial Information to GAAP" and "Supplemental Financial Data" immediately following the Consolidated Balance Sheets.
We do not provide a reconciliation of adjusted EBITDA guidance to net income guidance or a reconciliation of adjusted net income per diluted share guidance to net income per diluted share guidance, because we are unable to calculate with reasonable certainty the impact of potential future transactions, including, but not limited to, capital structure transactions, restructuring, acquisitions, divestitures or other events and asset impairments, without unreasonable effort. These amounts depend on various factors and could have a material impact on net income and net income per diluted share, but may be excluded from adjusted EBITDA and adjusted net income per diluted share. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information.
EARNINGS TELECONFERENCE INFORMATION
The Company will discuss its fourth quarter and full year financial results during a teleconference today, February 21, 2024, at 8:30 AM Eastern Time. The conference call is being webcast live at the Company's website at http://investor.shutterstock.com/. The webcast is listen-only. Those interested in participating in the question-and-answer session should register using the link below.
Participants may register for the call here (https://edge.media-server.com/mmc/p/cmuiaecy). It is recommended that you join 10 minutes prior to the event start (although you may register and join at any time during the call).
A webcast replay of the call will be available on the Company's website beginning on February 21, 2024 at approximately 10:30 AM Eastern Time.
ABOUT SHUTTERSTOCK
Shutterstock, Inc. (NYSE: SSTK) is a leading global creative platform offering high-quality creative content for transformative brands, digital media and marketing companies. Fueled by millions of creators around the world, a growing data engine and a dedication to product innovation, Shutterstock is the leading global platform for licensing from the most extensive and diverse collection of high-quality 3D models, videos, music, photographs, vectors and illustrations. From the world's largest content marketplace, to breaking news and A-list entertainment editorial access, to all-in-one content editing platform and studio production service—all using the latest in innovative technology—Shutterstock offers the most comprehensive selection of resources to bring storytelling to life.
Learn more at www.shutterstock.com and follow us on LinkedIn, Instagram, Twitter, Facebook and YouTube.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, particularly in the discussion under the captions "2027 Long Term Targets" and "2024 Guidance." All statements other than statements of historical fact are forward-looking. Examples of forward-looking statements include, but are not limited to, statements regarding guidance, industry prospects, future business, future results of operations or financial condition, new or planned features, products or services, management strategies and our competitive position. You can identify forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "aim," "anticipate," "believe," "estimate," "intend," "plan," "predict," "project," "seek," "potential," "opportunities," "targets" and other similar expressions and the negatives of such expressions. However, not all forward-looking statements contain these words. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements contained herein. Such risks and uncertainties include, among others, those risks discussed under the caption "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in other documents that the Company may file from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, Shutterstock's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. The forward-looking statements contained in this press release are made only as of this date and Shutterstock assumes no obligation to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law.
Shutterstock, Inc. | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenue | $ 217,219 | $ 217,726 | $ 874,587 | $ 827,826 | ||||
Operating expenses: | ||||||||
Cost of revenue | 95,832 | 87,925 | 352,630 | 314,306 | ||||
Sales and marketing | 62,665 | 47,819 | 214,749 | 203,154 | ||||
Product development | 23,440 | 17,112 | 96,162 | 65,434 | ||||
General and administrative | 33,158 | 38,559 | 142,646 | 132,644 | ||||
Impairment of lease and related assets | — | 18,664 | — | 18,664 | ||||
Total operating expenses | 215,095 | 210,079 | 806,187 | 734,202 | ||||
Income from operations | 2,124 | 7,647 | 68,400 | 93,624 | ||||
Bargain purchase gain | (1,543) | — | 50,261 | — | ||||
Other income / (expense), net | 1,479 | 862 | 3,807 | (2,587) | ||||
Income before income taxes | 2,060 | 8,509 | 122,468 | 91,037 | ||||
Provision for income taxes | 3,066 | 1,463 | 12,199 | 14,934 | ||||
Net (loss) / income | $ (1,006) | $ 7,046 | $ 110,269 | $ 76,103 | ||||
Earnings per share | ||||||||
Basic | $ (0.03) | $ 0.20 | $ 3.07 | $ 2.11 | ||||
Diluted | $ (0.03) | $ 0.19 | $ 3.04 | $ 2.08 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 35,699 | 35,821 | 35,878 | 36,042 | ||||
Diluted | 35,915 | 36,147 | 36,242 | 36,546 | ||||
Shutterstock, Inc. | ||||
December 31, 2023 | December 31, 2022 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 100,490 | $ 115,154 | ||
Accounts receivable, net of allowance of | 91,139 | 67,249 | ||
Prepaid expenses and other current assets | 100,944 | 33,268 | ||
Total current assets | 292,573 | 215,671 | ||
Property and equipment, net | 64,300 | 54,548 | ||
Right-of-use assets | 15,395 | 17,593 | ||
Intangibles assets, net | 184,396 | 173,087 | ||
Goodwill | 383,325 | 381,920 | ||
Deferred tax assets, net | 24,874 | 16,533 | ||
Other assets | 71,152 | 21,832 | ||
Total assets | $ 1,036,015 | $ 881,184 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 9,108 | $ 7,183 | ||
Accrued expenses | 131,443 | 89,387 | ||
Contributor royalties payable | 54,859 | 38,649 | ||
Deferred revenue | 203,463 | 187,070 | ||
Debt | 30,000 | 50,000 | ||
Other current liabilities | 23,513 | 11,445 | ||
Total current liabilities | 452,386 | 383,734 | ||
Deferred tax liability, net | 4,182 | 4,465 | ||
Lease liabilities | 29,404 | 35,611 | ||
Other non-current liabilities | 22,949 | 9,892 | ||
Total liabilities | 508,921 | 433,702 | ||
Commitment and contingencies | ||||
Stockholders' equity: | ||||
Common stock, | 399 | 396 | ||
Treasury stock, at cost; 4,410 and 3,776 shares as of December 31, 2023 and December 31, | (228,213) | (200,008) | ||
Additional paid-in capital | 424,229 | 391,482 | ||
Accumulated other comprehensive loss | (11,974) | (15,439) | ||
Retained earnings | 342,653 | 271,051 | ||
Total stockholders' equity | 527,094 | 447,482 | ||
Total liabilities and stockholders' equity | $ 1,036,015 | $ 881,184 | ||
Shutterstock, Inc. | ||||||||
Three Months Ended | Year Ended | |||||||
2023 | 2022 | 2023 | 2022 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net (loss) / income | $ (1,006) | $ 7,046 | $ 110,269 | $ 76,103 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 20,356 | 18,636 | 79,729 | 68,470 | ||||
Deferred taxes | (5,216) | (3,713) | (26,176) | (10,587) | ||||
Non-cash equity-based compensation | 11,988 | 11,782 | 48,577 | 35,740 | ||||
Impairment of lease and related assets | — | 18,664 | — | 18,664 | ||||
Bad debt expense | 500 | 2,704 | 1,894 | 3,697 | ||||
Bargain purchase gain | 1,543 | — | (50,261) | — | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (5,768) | (16,564) | (24,409) | (22,105) | ||||
Prepaid expenses and other current and non-current assets | (8,334) | 3,689 | (50,501) | 532 | ||||
Accounts payable and other current and non-current liabilities | 16,999 | 8,599 | 20,892 | (24,328) | ||||
Contributor royalties payable | 4,560 | 2,536 | 15,841 | 7,772 | ||||
Deferred revenue | (1,673) | 7,783 | 14,697 | 4,493 | ||||
Net cash provided by operating activities | $ 33,949 | $ 61,162 | $ 140,552 | $ 158,451 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (9,930) | (10,374) | (44,645) | (43,296) | ||||
Business combination, net of cash acquired | — | — | (53,721) | (211,843) | ||||
Cash received related to Giphy Retention Compensation | 18,950 | — | 53,657 | — | ||||
Asset acquisitions | — | (1,750) | — | (3,417) | ||||
Content acquisitions | (1,371) | (5,630) | (11,096) | (16,821) | ||||
Security deposit release / (payment) | (50) | 109 | 1,489 | (173) | ||||
Net cash provided by / (used in) investing activities | $ 7,599 | $ (17,645) | $ (54,316) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repurchase of treasury shares | (9,201) | — | (28,205) | (73,488) | ||||
Proceeds from exercise of stock options | — | — | 2 | 1,810 | ||||
Cash paid related to settlement of employee taxes related to RSU vesting | (625) | (625) | (15,834) | (22,601) | ||||
Payment of cash dividend | (9,644) | (8,585) | (38,667) | (34,589) | ||||
Proceeds from credit facility | — | — | 30,000 | 50,000 | ||||
Payment of credit facility | — | — | (50,000) | — | ||||
Payment of debt issuance costs | — | — | — | (619) | ||||
Net cash used in financing activities | $ (19,470) | $ (9,210) | $ (79,487) | |||||
Effect of foreign exchange rate changes on cash | 3,184 | 4,603 | 1,804 | (2,277) | ||||
Net increase / (decrease) in cash and cash equivalents | 25,262 | 38,910 | (14,664) | (198,863) | ||||
Cash and cash equivalents, beginning of period | 75,228 | 76,244 | 115,154 | 314,017 | ||||
Cash and cash equivalents, end of period | $ 100,490 | $ 115,154 | $ 100,490 | $ 115,154 | ||||
Supplemental Disclosure of Cash Information: | ||||||||
Cash paid for income taxes | $ 17,097 | $ 3,968 | $ 33,067 | $ 23,444 | ||||
Cash paid for interest | 492 | 571 | 1,724 | 1,045 | ||||
Shutterstock, Inc.
Reconciliation of Non-GAAP Financial Information to GAAP
(In thousands, except per share information)
(unaudited)
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per diluted share, revenue growth (including by distribution channel) on a constant currency basis (expressed as a percentage), billings and free cash flow are not financial measures prepared in accordance with
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Net (loss) / income | $ (1,006) | $ 7,046 | $ 110,269 | $ 76,103 | ||||
Add / (less) Non-GAAP adjustments: | ||||||||
Depreciation and amortization | 20,356 | 18,636 | 79,729 | 68,470 | ||||
Non-cash equity-based compensation | 11,988 | 11,782 | 48,577 | 35,740 | ||||
Impairment of lease and related assets | — | 18,664 | — | 18,664 | ||||
Bargain purchase gain | 1,543 | — | (50,261) | — | ||||
Giphy Retention Compensation Expense - non-recurring | 6,188 | — | 31,577 | — | ||||
Other adjustments, net (1) | 4,132 | 714 | 8,686 | 4,163 | ||||
Provision for income taxes | 3,066 | 1,463 | 12,199 | 14,934 | ||||
Adjusted EBITDA | $ 46,267 | $ 58,305 | $ 240,776 | $ 218,074 | ||||
Adjusted EBITDA margin | 21.3 % | 26.8 % | 27.5 % | 26.3 % | ||||
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(1) | Other adjustments, net includes unrealized foreign currency transaction gains and losses, severance costs associated with strategic workforce optimizations and interest income and expense. |
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Net (loss) / income | $ (1,006) | $ 7,046 | $ 110,269 | $ 76,103 | ||||
Add / (less) Non-GAAP adjustments: | ||||||||
Non-cash equity-based compensation | 11,988 | 11,782 | 48,577 | 35,740 | ||||
Tax effect of non-cash equity-based compensation (2) | (2,817) | (2,768) | (11,416) | (8,397) | ||||
Acquisition-related amortization expense (3) | 9,157 | 8,078 | 34,737 | 29,302 | ||||
Tax effect of acquisition-related amortization expense (2) | (2,152) | (1,898) | (8,163) | (6,886) | ||||
Impairment of lease and related assets | — | 18,664 | — | 18,664 | ||||
Tax effect of impairment of lease and related assets(2) | — | (4,199) | — | (4,199) | ||||
Bargain purchase gain | 1,543 | — | (50,261) | — | ||||
Giphy Retention Compensation Expense - non-recurring | 6,188 | — | 31,577 | — | ||||
Tax effect of Giphy Retention Compensation Expense - non- | (1,454) | — | (7,421) | — | ||||
Other | 5,668 | 1,576 | 12,493 | 1,576 | ||||
Tax effect of other(2) | (1,275) | (355) | (2,811) | (355) | ||||
Adjusted net income | $ 25,840 | $ 37,926 | $ 157,581 | $ 141,548 | ||||
Net income per diluted share | $ (0.03) | $ 0.19 | $ 3.04 | $ 2.08 | ||||
Adjusted net income per diluted share | $ 0.72 | $ 1.05 | $ 4.35 | $ 3.87 | ||||
Weighted average diluted shares | 35,915 | 36,147 | 36,242 | 36,546 | ||||
____________________________________________________________________________________________ | |
(2) | Statutory tax rates are used to calculate the tax effect of the adjustments. |
(3) | Of these amounts, |
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Total Revenue | $ 217,219 | $ 217,726 | $ 874,587 | $ 827,826 | ||||
Revenue growth | — % | 6 % | 6 % | 7 % | ||||
Revenue growth on a constant currency basis | — % | 9 % | 5 % | 11 % | ||||
Content revenue | $ 177,526 | $ 197,513 | $ 737,264 | $ 789,306 | ||||
Revenue growth: Content | (10) % | (1) % | (7) % | 4 % | ||||
Revenue growth: Content on a constant currency basis | (10) % | 2 % | (7) % | 8 % | ||||
Data, Distribution, and Services revenue | $ 39,693 | $ 20,213 | $ 137,323 | $ 38,520 | ||||
Revenue growth: Data, Distribution, and Services | 96 % | 265 % | 256 % | 142 % | ||||
Revenue growth: Data, Distribution, and Services on a constant | 96 % | 268 % | 256 % | 144 % | ||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Cash flow information: | ||||||||
Net cash provided by operating activities | $ 33,949 | $ 61,162 | $ 140,552 | $ 158,451 | ||||
Net cash provided by / (used in) investing activities | $ 7,599 | $ (17,645) | $ (54,316) | $ (275,550) | ||||
Net cash used in financing activities | $ (19,470) | $ (9,210) | $ (102,704) | $ (79,487) | ||||
Free cash flow: | ||||||||
Net cash provided by operating activities | $ 33,949 | $ 61,162 | $ 140,552 | $ 158,451 | ||||
Capital expenditures | (9,930) | (10,374) | (44,645) | (43,296) | ||||
Content acquisitions | (1,371) | (5,630) | (11,096) | (16,821) | ||||
Cash received related to Giphy Retention Compensation | 18,950 | — | 53,657 | — | ||||
Free cash flow | $ 41,598 | $ 45,158 | $ 138,468 | $ 98,334 | ||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Content revenue | $ 177,526 | $ 197,513 | $ 737,264 | $ 789,306 | ||||
Data, Distribution, and Services revenue | $ 39,693 | $ 20,213 | $ 137,323 | $ 38,520 | ||||
Total revenue | $ 217,219 | $ 217,726 | $ 874,587 | $ 827,826 | ||||
Change in total deferred revenue | $ 363 | $ 12,686 | $ 16,393 | $ 2,386 | ||||
Total billings | $ 217,582 | $ 230,412 | $ 890,980 | $ 830,212 | ||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
E-commerce revenue | $ 102,247 | $ 122,332 | $ 439,941 | $ 501,384 | ||||
Enterprise revenue | $ 114,972 | $ 95,394 | $ 434,646 | $ 326,442 | ||||
Total revenue | $ 217,219 | $ 217,726 | $ 874,587 | $ 827,826 | ||||
Shutterstock, Inc. | ||||||||||||||||
Historical Operating Metrics | ||||||||||||||||
Three Months Ended | ||||||||||||||||
12/31/23 | 9/30/23 | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | 3/31/22 | |||||||||
Subscribers (end of period, in thousands) (1) | 523 | 551 | 556 | 559 | 586 | 607 | 368 | 359 | ||||||||
Subscriber revenue (in millions) (2) | $ 85.2 | $ 88.3 | $ 87.4 | $ 90.6 | $ 88.8 | $ 87.7 | $ 84.7 | $ 85.4 | ||||||||
Average revenue per customer (last twelve months) (3) | $ 412 | $ 401 | $ 374 | $ 356 | $ 341 | $ 329 | $ 359 | $ 355 | ||||||||
Paid downloads (in millions) (4) | 35.4 | 36.4 | 38.5 | 42.7 | 42.5 | 42.8 | 43.4 | 44.6 | ||||||||
Revenue per download (5) | $ 5.02 | $ 4.76 | $ 4.71 | $ 4.41 | $ 4.49 | $ 4.43 | $ 4.46 | $ 4.22 | ||||||||
Content in our collection (end of period, in millions): (6) | ||||||||||||||||
Images | 771 | 757 | 734 | 731 | 719 | 527 | 511 | 471 | ||||||||
Footage clips | 54 | 52 | 50 | 48 | 47 | 28 | 27 | 25 | ||||||||
Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from TurboSquid beginning February 2022, from PicMonkey beginning September 2022, and from Pond5 and Splash News beginning May 2023. These metrics exclude the respective counts and revenues from Giphy. |
(1) Subscribers is defined as those customers who purchase one or more of our monthly recurring products for a continuous period of at least three months, measured as of the end of the reporting period. |
(2) Subscriber revenue is defined as the revenue generated from subscribers during the period. |
(3) Average revenue per customer is calculated by dividing total revenue for the last twelve-month period by customers. Customers is defined as total active, paying customers that contributed to total revenue over the last twelve-month period. |
(4) Paid downloads is the number of downloads that our customers make in a given period of our content. Paid downloads exclude content related to our Studios business, downloads of content that are offered to customers for no charge, including our free trials and downloads associated with our computer vision offering. |
(5) Revenue per download is the amount of revenue recognized in a given period divided by the number of paid downloads in that period excluding revenue from our Studios business, revenue that is not derived from or associated with content licenses and revenue associated with our computer vision offering. |
(6) Content in our collection represents approved images (photographs, vectors and illustrations) and footage (in number of clips) in our library at the end of the period. This metric excludes content that is not uploaded directly to our site but is available for license by our customers through an application program interface, content from our Studios business and AI generated content. Prior to December 31, 2022, this metric only included approved images and footage clips in our library on shutterstock.com at the end of the period. |
Equity-Based Compensation by expense category | ||||||||||||||||
Three Months Ended | ||||||||||||||||
($ in thousands) | 12/31/23 | 9/30/23 | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | 3/31/22 | ||||||||
Cost of revenue | $ 145 | $ 180 | $ 306 | $ 184 | $ 160 | $ 173 | $ 156 | $ 78 | ||||||||
Sales and marketing | 2,201 | 2,067 | 2,487 | 604 | 1,426 | 1,503 | 1,629 | 928 | ||||||||
Product development | 3,022 | 3,509 | 4,221 | 2,448 | 3,085 | 2,957 | 2,557 | 1,781 | ||||||||
General and administrative | 6,620 | 7,247 | 7,929 | 5,407 | 7,111 | 4,455 | 2,702 | 5,039 | ||||||||
Total non-cash equity-based compensation | $ 8,643 | $ 9,088 | $ 7,044 | $ 7,826 | ||||||||||||
Depreciation and Amortization by expense category | ||||||||||||||||
Three Months Ended | ||||||||||||||||
($ in thousands) | 12/31/23 | 9/30/23 | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | 3/31/22 | ||||||||
Cost of revenue | ||||||||||||||||
General and administrative | 1,404 | 1,400 | 1,070 | 1,031 | 1,295 | 1,404 | 1,338 | 1,305 | ||||||||
Total depreciation and amortization | ||||||||||||||||
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SOURCE Shutterstock, Inc.
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