Achieves Record Revenues and Adjusted EBITDA
and Increases Guidance for 2024
Announces Departure of
CFO and Appointment of Incoming CFO
NEW
YORK, Oct. 29, 2024 /PRNewswire/ --
Shutterstock, Inc. (NYSE: SSTK) (the "Company"), a leading
global creative platform offering high-quality creative content for
transformative brands, digital media and marketing companies, today
announced financial results for the third quarter ended
September 30, 2024.
Commenting on the Company's performance, Paul Hennessy, the Company's Chief Executive
Officer, said, "Shutterstock generated record Revenue and Adjusted
EBITDA during the third quarter, exceeding our expectations. With
the Envato acquisition now closed, we could not be more pleased
with the results we are seeing. With the unlimited multi-asset
subscription now part of our overall product suite, we are now well
positioned to fulfill our customer needs. Content performance
improved yet again in the quarter, and Data, Distribution, and
Services has grown 40% year to date. As a result of this business
momentum, we are pleased to be able to raise our guidance for both
revenue and Adjusted EBITDA for 2024."
"Additionally, after five years at Shutterstock, Jarrod Yahes, our Chief Financial Officer, will
be departing to pursue another opportunity. I want to thank Jarrod
for his incredible contributions to Shutterstock and wish him the
very best in the future. I'd also like to announce that
Rik Powell will become our Chief
Financial Officer. Rik started with the Company in June as SVP,
Finance and Investor Relations and given Rik's extensive
experience, I am confident that his leadership and expertise will
play a vital role in continuing to drive profitable growth for our
shareholders."
Third Quarter 2024 measures as compared to Third Quarter
2023:
Financial Measures
- Revenues were $250.6 million
compared to $233.2 million.
- Net income was $17.6 million
compared to $28.4 million.
- Net income per diluted common share was $0.50 compared to $0.79.
- Adjusted net income was $46.4
million compared to $45.5
million.
- Adjusted net income per diluted common share was $1.31 compared to $1.26.
- Adjusted EBITDA was $70.0 million
compared to $64.7 million.
Acquisition of Envato Pty Ltd.
On July 22, 2024, the Company
completed its acquisition of Envato Pty Ltd. ("Envato") pursuant to
a Share Purchase Agreement entered into May
1, 2024, and the Company purchased all of the issued and
outstanding capital stock of Envato. The aggregate consideration
paid by the Company, after customary working capital and other
adjustments, was $250 million.
THIRD QUARTER RESULTS
Revenue
Third quarter revenue of $250.6 million increased $17.3 million or 7% as compared to the third
quarter of 2023.
Revenue from our Content product offering increased $24.9 million, or 14%, as compared to the
third quarter of 2023, to $203.7 million. The growth in our Content
revenues was driven by revenue generated from Envato. Content
revenue represented 81% of our total revenue in the third quarter
of 2024. Revenue generated from our Data, Distribution, and
Services product offering decreased $7.6 million, or 14%, as compared to the
third quarter of 2023, to $46.9 million, and represented 19% of third
quarter revenue in 2024.
Revenue was not impacted on a constant currency basis in the
three months ended September 30, 2024, compared to the same
period in 2023.
Net income and net income per diluted common share
Net income in the third quarter of 2024 of $17.6 million decreased $10.8 million as compared to net income of
$28.4 million for the third quarter
in 2023. Net income per diluted common share was $0.50, as compared to $0.79 for the same period in 2023. The 2023 net
income and net income per diluted common share benefited from a
one-time $9.9 million non-taxable
bargain purchase gain associated with the acquisition of Giphy.
Adjusted net income and adjusted net income per diluted
common share
Adjusted net income in the third quarter of 2024 of $46.4 million increased $0.8 million as compared to adjusted net income
of $45.5 million for the third
quarter in 2023. Third quarter 2024 adjusted net income was
favorably impacted by the quarter's revenue growth, partially
offset by the costs associated with the acquisition of Envato.
Adjusted net income per diluted common share was $1.31 as compared to $1.26 for the third quarter of 2023, an increase
of $0.05 per diluted share.
Adjusted EBITDA
Adjusted EBITDA of $70.0 million
for the third quarter of 2024 increased by $5.3 million, or 8%, as compared to the
third quarter of 2023, primarily due to the contribution from
Envato. Net income margin of 7.0% for the third quarter of 2024
decreased by 5.2%, as compared to 12.2% in the third quarter of
2023. The adjusted EBITDA margin of 27.9% for the third quarter of
2024 increased by 0.2%, as compared to 27.7% in the third quarter
of 2023.
THIRD QUARTER LIQUIDITY
Our cash and cash equivalents increased by $56.5 million to $131.4 million at September 30, 2024,
as compared with $74.9 million
as of June 30, 2024. This increase
was driven by $213.3 million of
net cash provided by financing activities, partially offset by
$11.6 million of net cash used
in our operating activities and $147.9 million of net cash used in investing
activities.
Net cash used in our operating activities was driven by our
operating income, and changes in the timing of cash collections
from our customers and payments pertaining to operating
expenses. Operating cash flows were also unfavorably impacted
by payments made for Envato Seller Obligations1 and
payments made for the Giphy Retention
Compensation2.
Cash used in investing activities for the three months ended
September 30, 2024 consisted of $159.6 million for the acquisition of
Envato, net of cash acquired, and $15.4 million related to capital
expenditures and content acquisition, partially offset by
$26.9 million related to the
receipt of the Giphy Retention Compensation, as reimbursed by the
Giphy seller.
Cash provided by financing activities for the three months ended
September 30, 2024 consisted of $280.0 million in new debt, used for funding
the acquisition of Envato, and to pay off the existing Credit
Facility. This was partially offset by $30.0 million used for the repayment of our
Credit Facility, $21.0 million
paid for the repurchase of common stock under our share repurchase
program, $10.6 million related
to the payment of the quarterly cash dividend, $2.9 million paid in settlement of tax
withholding obligations related to employee stock-based
compensation awards, and $2.2 million
paid for debt issuance costs.
Adjusted free cash flow was $45.7 million for the third quarter of 2024,
an increase of $33.0 million
from the third quarter of 2023.
QUARTERLY CASH DIVIDEND
During the three months ended September 30, 2024, the
Company declared and paid a cash dividend of $0.30 per common share or $10.6 million.
On October 21, 2024, the Board of Directors declared a
dividend of $0.30 per share of
outstanding common stock, payable on December 13, 2024 to
stockholders of record at the close of business on
November 29, 2024.
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1 In
connection with the purchase of Envato, Envato's acquired cash
included $63.4 million to fund payments to be made on behalf of the
Envato sellers after the closing of the acquisition (the "Envato
Seller Obligations"). These obligations were triggered upon the
closing of the acquisition, and $45.7 million of these obligations
were paid as of September 30, 2024. The acquired cash from
Envato is reflected as a reduction of the purchase price in cash
flows from investing activities.
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2 The
payments for Giphy Retention Compensation relate to the Company's
payments made to Giphy employees for (i) recurring salary, bonuses,
and benefits, (ii) one-time employment inducement bonuses and (iii)
vesting of the cash value of unvested Meta equity awards held by
the employees prior to closing, which are reflected in the
Company's operating expenses. These payments were required in
accordance with the terms of the acquisition and are reported in
operating cash flows. The Company received reimbursement for these
amounts from Meta, which are reported in cash flows from investing
activities.
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KEY OPERATING METRICS
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Three Months Ended
September 30,
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Shutterstock1
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Envato2
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Pro
Forma3
|
|
|
|
|
2024
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2024
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2024
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2023
|
|
|
|
|
Subscribers (end of
period)(4)
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470,000
|
|
635,000
|
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1,105,000
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|
551,000
|
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Subscriber revenue (in
millions)(5)
|
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$
78.7
|
|
$
34.4
|
|
$
113.1
|
|
$
88.3
|
|
|
|
|
|
|
|
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|
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Average revenue per
customer (last twelve months)(6)
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$
446
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|
$
85
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$
254
|
|
$
401
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Paid downloads (in
millions)(7)
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32.9
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79.4
|
|
112.3
|
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36.4
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Nine Months Ended
September 30,
|
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Shutterstock1
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Envato2
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Pro
Forma3
|
|
|
|
|
2024
|
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2024
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|
2024
|
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2023
|
|
|
|
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Subscribers (end of
period)(4)
|
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470,000
|
|
635,000
|
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1,105,000
|
|
551,000
|
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Subscriber revenue (in
millions)(5)
|
|
$
242.9
|
|
$
102.0
|
|
$
344.9
|
|
$
266.3
|
|
|
|
|
|
|
|
|
|
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Average revenue per
customer (last twelve months)(6)
|
|
$
446
|
|
$
85
|
|
$
254
|
|
$
401
|
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Paid downloads (in
millions)(7)
|
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101.3
|
|
229.6
|
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330.9
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117.6
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(1) Represents
Shutterstock, Inc. key operating metrics before combining the
Envato related metrics. 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 Pond5 and
Splash News beginning May 2023, and, for Average Revenue per
Customer, from Giphy beginning July 2024. These metrics exclude the
respective counts and revenues from our acquisitions of Backgrid
and Envato.
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(2) Envato Subscribers
and Subscriber Revenue are presented as if Envato was acquired as
of the beginning of the period presented, and represent metrics
incremental to amounts presented under the "Shutterstock, Inc."
heading. Envato Average revenue per customer is derived from Envato
historical results over the last twelve months.
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(3) The Pro Forma key
operating metrics are derived from (i) the Shutterstock amounts
before combining with Envato and (ii) the historical Envato
metrics, as discussed in footnote 2 above.
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(4) 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.
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(5) Subscriber
revenue is defined as the revenue generated from subscribers during
the period.
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(6) 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.
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(7) 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 metadata
delivered through our data deal offering.
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2024 GUIDANCE
The Company is updating its guidance as
follows:
- Revenue guidance of $935 million
to $940 million, representing growth
of 7% to 7.5% year-over-year.
- Adjusted net income per diluted share of between $4.22 to $4.31.
- Adjusted EBITDA of $247 million
to $250 million.
NON-GAAP FINANCIAL MEASURES
To supplement Shutterstock's consolidated financial statements
presented in accordance with the accounting principles generally
accepted in the United States, or
GAAP, Shutterstock's management considers certain financial
measures that are not prepared in accordance with GAAP,
collectively referred to as non-GAAP financial measures, including
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 adjusted free cash flow.
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, unrealized losses / gains on
investments, 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
(reported in Other), unrealized losses / gains on investments and
the estimated tax impact of such adjustments; adjusted net income
per diluted common share as adjusted net income divided by weighted
average diluted shares; revenue growth (including by product
offering) 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
adjusted free cash flow as net 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 and cash paid for Envato
Seller Obligations.
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 United
Kingdom Competition and Markets Authority (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 September 30,
2024, the Company also incurred $4.5 million of Giphy Retention Compensation
expense related to recurring employee costs, which is included in
operating expenses, and are not included in the below adjustments
for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted
net income and adjusted net income per diluted common share.
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 common share, revenue growth (including by product
offering) on a constant currency basis (expressed as a percentage),
billings and adjusted 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 common 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
product offering) 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 adjusted 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 common share, revenue
growth (including by product offering) on a constant currency basis
(expressed as a percentage), billings and adjusted 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; (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 each of our non-GAAP
financial measures (adjusted EBITDA, adjusted EBITDA margin,
adjusted net income, adjusted net income per diluted common share,
revenue growth (including by product offering) on a constant
currency basis (expressed as a percentage), billings, adjusted free
cash flow), and each measure's most directly comparable financial
measure 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 this cannot be done without unreasonable effort
due to the impact of potential future transactions, including, but
not limited to, capital structure transactions, restructuring,
acquisitions, divestitures or other events and asset impairments.
These amounts which lack predictability 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. 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 third quarter and financial results
during a teleconference today, October 29, 2024, at
8:30 AM Eastern Time. The conference
call is being webcast live and can be accessed by either visiting
the Company's website at http://investor.shutterstock.com/ or
clicking here (https://edge.media-server.com/mmc/p/j2xstbqe/) for
direct access. The webcast is listen-only.
A webcast replay of the call will be available on the Company's
website beginning on October 29, 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 services—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, X, 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 caption "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," "guidance" 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.
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Shutterstock, Inc.
|
|
Consolidated
Statements of Operations
|
|
(In thousands,
except for per share data)
|
|
(unaudited)
|
|
|
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Three Months Ended
September 30,
|
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Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
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|
|
|
Revenue
|
|
$
250,588
|
|
$
233,248
|
|
$
684,956
|
|
$
657,368
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
104,405
|
|
94,219
|
|
283,863
|
|
256,798
|
|
Sales and
marketing
|
|
55,403
|
|
56,165
|
|
163,520
|
|
152,084
|
|
Product
development
|
|
28,610
|
|
28,098
|
|
69,520
|
|
72,722
|
|
General and
administrative
|
|
44,021
|
|
37,574
|
|
112,492
|
|
109,488
|
|
Total operating
expenses
|
|
232,439
|
|
216,056
|
|
629,395
|
|
591,092
|
|
Income from
operations
|
|
18,149
|
|
17,192
|
|
55,561
|
|
66,276
|
|
Bargain purchase
gain
|
|
—
|
|
9,864
|
|
—
|
|
51,804
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|
Interest
expense
|
|
(4,451)
|
|
(562)
|
|
(5,574)
|
|
(1,286)
|
|
Other income,
net
|
|
3,829
|
|
1,119
|
|
4,490
|
|
3,614
|
|
Income before income
taxes
|
|
17,527
|
|
27,613
|
|
54,477
|
|
120,408
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|
(Benefit) / Provision
for income taxes
|
|
(88)
|
|
(806)
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|
17,116
|
|
9,133
|
|
Net income
|
|
$
17,615
|
|
$
28,419
|
|
$
37,361
|
|
$
111,275
|
|
|
|
|
|
|
|
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Earnings per
share:
|
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|
|
|
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|
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Basic
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$
0.50
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$
0.79
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|
$
1.05
|
|
$
3.10
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|
Diluted
|
|
$
0.50
|
|
$
0.79
|
|
$
1.04
|
|
$
3.06
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,174
|
|
35,912
|
|
35,486
|
|
35,938
|
|
Diluted
|
|
35,472
|
|
36,081
|
|
35,838
|
|
36,352
|
|
Shutterstock, Inc.
|
|
Consolidated Balance
Sheets
|
|
(In thousands,
except par value amount)
|
|
(unaudited)
|
|
|
|
September 30,
2024
|
|
December 31,
2023
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
131,393
|
|
$
100,490
|
|
Accounts receivable,
net of allowance of $4,368 and $6,335
|
|
92,169
|
|
91,139
|
|
Prepaid expenses and
other current assets
|
|
53,820
|
|
100,944
|
|
Total current
assets
|
|
277,382
|
|
292,573
|
|
Property and
equipment, net
|
|
68,623
|
|
64,300
|
|
Right-of-use
assets
|
|
14,738
|
|
15,395
|
|
Intangible assets,
net
|
|
245,671
|
|
184,396
|
|
Goodwill
|
|
607,382
|
|
383,325
|
|
Deferred tax assets,
net
|
|
49,960
|
|
24,874
|
|
Other
assets
|
|
85,085
|
|
71,152
|
|
Total
assets
|
|
$
1,348,841
|
|
$
1,036,015
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
15,083
|
|
$
9,108
|
|
Accrued
expenses
|
|
119,401
|
|
131,443
|
|
Contributor royalties
payable
|
|
90,572
|
|
54,859
|
|
Deferred
revenue
|
|
226,367
|
|
203,463
|
|
Debt
|
|
158,834
|
|
30,000
|
|
Other current
liabilities
|
|
53,108
|
|
23,513
|
|
Total current
liabilities
|
|
663,365
|
|
452,386
|
|
Deferred tax
liability, net
|
|
3,115
|
|
4,182
|
|
Long-term
debt
|
|
120,392
|
|
—
|
|
Lease
liabilities
|
|
24,739
|
|
29,404
|
|
Other non-current
liabilities
|
|
14,315
|
|
22,949
|
|
Total
liabilities
|
|
825,926
|
|
508,921
|
|
Commitments and
contingencies
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common stock, $0.01
par value; 200,000 shares authorized; 40,371 and 39,982 shares
issued and 34,850 and 35,572 shares outstanding as of
September 30, 2024 and
December 31, 2023, respectively
|
|
403
|
|
399
|
|
Treasury stock, at
cost; 5,521 and 4,410 shares as of September 30, 2024
and
December 31, 2023
|
|
(269,804)
|
|
(228,213)
|
|
Additional paid-in
capital
|
|
453,734
|
|
424,229
|
|
Accumulated other
comprehensive loss
|
|
(9,494)
|
|
(11,974)
|
|
Retained
earnings
|
|
348,076
|
|
342,653
|
|
Total stockholders'
equity
|
|
522,915
|
|
527,094
|
|
Total liabilities and
stockholders' equity
|
|
$
1,348,841
|
|
$
1,036,015
|
|
Shutterstock, Inc.
|
|
Consolidated
Statements of Cash Flows
|
|
(In thousands,
except par value amount) (unaudited)
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
17,615
|
|
$
28,419
|
|
$
37,361
|
|
$
111,275
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
21,643
|
|
21,271
|
|
64,339
|
|
59,373
|
|
Deferred
taxes
|
|
(9,269)
|
|
(20,814)
|
|
(8,766)
|
|
(20,960)
|
|
Non-cash equity-based
compensation
|
|
15,094
|
|
13,003
|
|
41,220
|
|
36,589
|
|
Bad debt
expense
|
|
(18)
|
|
369
|
|
(1,790)
|
|
1,394
|
|
Bargain purchase
gain
|
|
—
|
|
(9,864)
|
|
—
|
|
(51,804)
|
|
Unrealized gain on
investments
|
|
(1,557)
|
|
—
|
|
(1,688)
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
12,474
|
|
(24,350)
|
|
8,595
|
|
(18,641)
|
|
Prepaid expenses and
other current and non-current assets
|
|
5,392
|
|
(12,333)
|
|
(19,907)
|
|
(42,167)
|
|
Accounts payable and
other current and non-current liabilities
|
|
(30,534)
|
|
8,037
|
|
(47,433)
|
|
3,893
|
|
Envato Seller
Obligations
|
|
(45,748)
|
|
—
|
|
(45,748)
|
|
—
|
|
Contributor royalties
payable
|
|
11,938
|
|
9,459
|
|
22,626
|
|
11,281
|
|
Deferred
revenue
|
|
(8,615)
|
|
(3,183)
|
|
(24,129)
|
|
16,370
|
|
Net cash (used in) /
provided by operating activities
|
|
$
(11,585)
|
|
$
10,014
|
|
$
24,680
|
|
$
106,603
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(14,761)
|
|
(11,845)
|
|
(38,297)
|
|
(34,715)
|
|
Business combination,
net of cash acquired
|
|
(159,597)
|
|
—
|
|
(179,071)
|
|
(53,721)
|
|
Cash received related
to Giphy Retention Compensation
|
|
26,922
|
|
18,955
|
|
63,444
|
|
34,707
|
|
Acquisition of
content
|
|
(652)
|
|
(4,473)
|
|
(2,473)
|
|
(9,725)
|
|
Security deposit
payment
|
|
195
|
|
1,576
|
|
277
|
|
1,539
|
|
Net cash (used in) /
provided by investing activities
|
|
$ (147,893)
|
|
$ 4,213
|
|
$ (156,120)
|
|
$
(61,915)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Repurchase of treasury
shares
|
|
(20,999)
|
|
(15,004)
|
|
(41,591)
|
|
(19,004)
|
|
Proceeds from exercise
of stock options
|
|
—
|
|
(1)
|
|
—
|
|
2
|
|
Cash paid related to
settlement of employee taxes related to RSU vesting
|
|
(2,856)
|
|
(664)
|
|
(11,715)
|
|
(15,209)
|
|
Payment of cash
dividends
|
|
(10,611)
|
|
(9,636)
|
|
(31,938)
|
|
(29,023)
|
|
Proceeds from credit
facility
|
|
280,000
|
|
—
|
|
280,000
|
|
30,000
|
|
Repayment of credit
facility
|
|
(30,000)
|
|
—
|
|
(30,000)
|
|
(50,000)
|
|
Payment of debt
issuance costs
|
|
(2,200)
|
|
—
|
|
(2,200)
|
|
—
|
|
Net cash provided by /
(used in) financing activities
|
|
$
213,334
|
|
$
(25,305)
|
|
$
162,556
|
|
$
(83,234)
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
|
2,666
|
|
(840)
|
|
(213)
|
|
(1,380)
|
|
Net increase /
(decrease) in cash and cash equivalents
|
|
56,522
|
|
(11,918)
|
|
30,903
|
|
(39,926)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
74,871
|
|
87,146
|
|
100,490
|
|
115,154
|
|
Cash and cash
equivalents, end of period
|
|
$
131,393
|
|
$
75,228
|
|
$
131,393
|
|
$
75,228
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Information:
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$ 9,735
|
|
$ 9,175
|
|
$
22,295
|
|
$
15,970
|
|
Cash paid for
interest
|
|
1,950
|
|
803
|
|
2,955
|
|
1,232
|
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 adjusted free cash flow
are not financial measures prepared in accordance with United States generally accepted accounting
principles (GAAP). Such non-GAAP financial measures should not be
construed as alternatives to any other measures of performance
determined in accordance with GAAP. Investors are cautioned 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.
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
|
|
$
17,615
|
|
$
28,419
|
|
$
37,361
|
|
$
111,275
|
|
Add / (less) Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Non-cash
equity-based compensation
|
|
15,094
|
|
13,003
|
|
41,220
|
|
36,589
|
|
Tax
effect of non-cash equity-based compensation
(1)(2)
|
|
(3,547)
|
|
(3,056)
|
|
(3,332)
|
|
(8,599)
|
|
Acquisition-related amortization expense
(3)
|
|
9,332
|
|
9,052
|
|
27,658
|
|
25,580
|
|
Tax
effect of acquisition-related amortization expense
(1)
|
|
(2,193)
|
|
(2,127)
|
|
(6,499)
|
|
(6,011)
|
|
Bargain
purchase gain
|
|
—
|
|
(9,864)
|
|
—
|
|
(51,804)
|
|
Giphy
Retention Compensation Expense - non-recurring
|
|
10,281
|
|
8,198
|
|
21,825
|
|
25,389
|
|
Tax
effect of Giphy Retention Compensation Expense - non-
recurring(1)
|
|
(2,416)
|
|
(1,927)
|
|
(5,129)
|
|
(5,967)
|
|
Other(4)
|
|
3,272
|
|
4,969
|
|
3,413
|
|
6,825
|
|
Tax
effect of other(1)
|
|
(1,087)
|
|
(1,118)
|
|
(1,148)
|
|
(1,536)
|
|
Adjusted net
income(4)
|
|
$
46,351
|
|
$
45,549
|
|
$
115,369
|
|
$
131,741
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted
common share
|
|
$
0.50
|
|
$
0.79
|
|
$
1.04
|
|
$
3.06
|
|
Adjusted net income per
diluted common share
|
|
$
1.31
|
|
$
1.26
|
|
$
3.22
|
|
$
3.62
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares
|
|
35,472
|
|
36,081
|
|
35,838
|
|
36,352
|
|
|
|
|
|
|
(1)
|
Statutory tax rates are
used to calculate the tax effect of the adjustments.
|
|
(2)
|
For the nine months
ended September 30, 2024, the tax effect of non-cash equity-based
compensation includes a $6.3 million add-back for the reduction of
deferred tax assets associated with the expiration of
performance-based stock options and restricted stock units granted
the Company's Founder and Executive Chairman in 2014. The
performance-based metrics were not met, the awards were not
exercisable, and the Company recognized a non-cash tax expense for
the change in deferred taxes.
|
|
(3)
|
Of these amounts, $7.8
million and $8.1 million are included in cost of revenue for the
three months ended September 30, 2024 and 2023, respectively, and
$24.1 million and $23.4 million are included in cost of revenue for
the nine months ended September 30, 2024 and 2023, respectively.
The remainder of acquisition-related amortization expense is
included in general and administrative expense in the Statement of
Operations.
|
|
(4)
|
Other consists of
unrealized gains and losses on investments and severance costs
associated with strategic workforce optimizations.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
|
|
$
17,615
|
|
$
28,419
|
|
$
37,361
|
|
$
111,275
|
|
Add / (less) Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
4,451
|
|
562
|
|
5,574
|
|
1,286
|
|
Interest
income
|
|
(1,086)
|
|
(1,894)
|
|
(3,477)
|
|
(2,727)
|
|
(Benefit)
/ Provision for income taxes
|
|
(88)
|
|
(806)
|
|
17,116
|
|
9,133
|
|
Depreciation and amortization
|
|
21,643
|
|
21,271
|
|
64,339
|
|
59,373
|
|
EBITDA
|
|
$
42,535
|
|
$
47,552
|
|
$
120,913
|
|
$
178,340
|
|
|
|
|
|
|
|
|
|
|
Non-cash
equity-based compensation
|
|
15,094
|
|
13,003
|
|
41,220
|
|
36,589
|
|
Bargain
purchase gain
|
|
—
|
|
(9,864)
|
|
—
|
|
(51,804)
|
|
Giphy
Retention Compensation Expense - non-recurring
|
|
10,281
|
|
8,198
|
|
21,825
|
|
25,389
|
|
Foreign
currency (gain) / loss
|
|
(1,185)
|
|
775
|
|
675
|
|
(887)
|
|
Unrealized gain on investment
|
|
(1,558)
|
|
—
|
|
(1,688)
|
|
—
|
|
Workforce
optimization - severance
|
|
4,830
|
|
5,026
|
|
5,101
|
|
6,882
|
|
Adjusted
EBITDA
|
|
$
69,997
|
|
$
64,690
|
|
$
188,046
|
|
$
194,509
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
250,588
|
|
$
233,248
|
|
$
684,956
|
|
$
657,368
|
|
Net income
margin
|
|
7.0 %
|
|
12.2 %
|
|
5.5 %
|
|
16.9 %
|
|
Adjusted EBITDA
margin
|
|
27.9 %
|
|
27.7 %
|
|
27.5 %
|
|
29.6 %
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Reported Revenue (in
thousands)
|
|
$
250,588
|
|
$
233,248
|
|
$
684,956
|
|
$
657,368
|
|
|
|
|
|
|
|
|
|
|
Revenue
growth
|
|
7 %
|
|
14 %
|
|
4 %
|
|
8 %
|
|
Revenue growth on a
constant currency basis
|
|
7 %
|
|
12 %
|
|
4 %
|
|
7 %
|
|
|
|
|
|
|
|
|
|
|
Content reported
revenue (in thousands)
|
|
$
203,713
|
|
$
178,791
|
|
$
547,494
|
|
$
559,738
|
|
Content revenue
growth
|
|
14 %
|
|
(9) %
|
|
(2) %
|
|
(5) %
|
|
Content revenue
growth on a constant currency basis
|
|
13 %
|
|
(11) %
|
|
(2) %
|
|
(6) %
|
|
|
|
|
|
|
|
|
|
|
Data, Distribution, and
Services reported revenue (in thousands)
|
|
$
46,875
|
|
$
54,457
|
|
$
137,462
|
|
$
97,630
|
|
Data, Distribution,
and Services revenue growth
|
|
(14) %
|
|
611 %
|
|
41 %
|
|
433 %
|
|
Data, Distribution,
and Services revenue growth on a constant currency
basis
|
|
(14) %
|
|
609 %
|
|
41 %
|
|
433 %
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Cash flow
information:
|
|
|
|
|
|
|
|
|
|
Net cash (used in) /
provided by operating activities
|
|
$
(11,585)
|
|
$
10,014
|
|
$
24,680
|
|
$
106,603
|
|
Net cash (used in) /
provided by investing activities
|
|
$
(147,893)
|
|
$
4,213
|
|
$
(156,120)
|
|
$
(61,915)
|
|
Net cash provided by /
(used in) financing activities
|
|
$
213,334
|
|
$
(25,305)
|
|
$
162,556
|
|
$
(83,234)
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
|
Net cash (used in) /
provided by operating activities
|
|
$
(11,585)
|
|
$
10,014
|
|
$
24,680
|
|
$
106,603
|
|
Capital
expenditures
|
|
(14,761)
|
|
(11,845)
|
|
(38,297)
|
|
(34,715)
|
|
Content
acquisitions
|
|
(652)
|
|
(4,473)
|
|
(2,473)
|
|
(9,725)
|
|
Cash received related
to Giphy Retention Compensation
|
|
26,922
|
|
18,955
|
|
63,444
|
|
34,707
|
|
Cash paid for Envato
Seller Obligations(1)
|
|
45,748
|
|
—
|
|
45,748
|
|
—
|
|
Adjusted Free Cash
Flow
|
|
$
45,672
|
|
$
12,651
|
|
$
93,102
|
|
$
96,870
|
|
|
|
(1)
|
Envato Seller
Obligations relate to payments made on behalf of the Envato
sellers' after the closing of the acquisition. These
liabilities were funded from the acquired cash on the Envato
balance sheet and are not indicative of obligations and cash flows
to be incurred prospectively.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Content
|
|
$
203,713
|
|
$
178,791
|
|
$
547,494
|
|
$
559,738
|
|
Data, Distribution, and
Services
|
|
$
46,875
|
|
$
54,457
|
|
$
137,462
|
|
$
97,630
|
|
Total
revenue
|
|
$
250,588
|
|
$
233,248
|
|
$
684,956
|
|
$
657,368
|
|
|
|
|
|
|
|
|
|
|
Change in total
deferred revenue(1)
|
|
$
(7,043)
|
|
$
(4,383)
|
|
$
(23,984)
|
|
$
16,030
|
|
Total
billings
|
|
$
243,545
|
|
$
228,865
|
|
$
660,972
|
|
$
673,398
|
|
|
|
|
|
|
(1)
|
Change in total
deferred revenue excludes deferred revenue acquired through
business combinations.
|
|
Shutterstock, Inc.
|
|
Supplemental
Financial Data
|
|
(unaudited)
|
|
|
Historical Operating
Metrics
|
|
|
Three Months
Ended
|
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers (end of
period, in thousands) (1)
|
|
470
|
|
490
|
|
499
|
|
523
|
|
551
|
|
556
|
|
559
|
|
586
|
|
Subscriber revenue (in
millions) (2)
|
|
$
78.7
|
|
$
80.3
|
|
$
83.9
|
|
$
85.2
|
|
$
88.3
|
|
$
87.4
|
|
$
90.6
|
|
$
88.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average revenue per
customer (last twelve months) (3)
|
|
$ 446
|
|
$ 434
|
|
$ 418
|
|
$ 412
|
|
$ 401
|
|
$ 374
|
|
$ 356
|
|
$ 341
|
|
Paid downloads (in
millions) (4)
|
|
32.9
|
|
33.4
|
|
35.0
|
|
35.4
|
|
36.4
|
|
38.5
|
|
42.7
|
|
42.5
|
|
|
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 Pond5 and Splash News beginning May 2023, and, for
Average Revenue per Customer, from Giphy starting July 2024. These
metrics exclude the respective counts and revenues from Backgrid
and Envato.
|
|
|
(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. Envato
subscribers for the period ended September 30, 2024 were 0.6
million.
|
|
|
(2) Subscriber revenue
is defined as the revenue generated from subscribers during the
period. Envato's subscriber revenue for the three months ended
September 30, 2024 was $34.4 million.
|
|
|
(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. Envato's average revenue per customer for
the last twelve-month period ended September 30, 2024 was $85 per
customer.
|
|
|
(4) Paid downloads is
the number of downloads that our customers make in a given period
of our content. Paid downloads exclude content related to our
Studios business, downloads of content that are offered to
customers for no charge, including our free trials and metadata
delivered through our data deal offering. Envato had 79.4 million
paid downloads during the three months ended September 30,
2024.
|
|
Equity-Based
Compensation by expense category
|
|
|
|
Three Months
Ended
|
|
($ in
thousands)
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$ 443
|
|
$ 300
|
|
$ 224
|
|
$ 145
|
|
$ 180
|
|
$ 306
|
|
$ 184
|
|
$ 160
|
|
Sales and
marketing
|
|
3,226
|
|
3,167
|
|
2,011
|
|
2,201
|
|
2,067
|
|
2,487
|
|
604
|
|
1,426
|
|
Product
development
|
|
2,745
|
|
4,171
|
|
2,285
|
|
3,022
|
|
3,509
|
|
4,221
|
|
2,448
|
|
3,085
|
|
General and
administrative
|
|
8,680
|
|
7,338
|
|
6,630
|
|
6,620
|
|
7,247
|
|
7,929
|
|
5,407
|
|
7,111
|
|
Total non-cash
equity-based compensation
|
|
$ 15,094
|
|
$ 14,976
|
|
$ 11,150
|
|
$ 11,988
|
|
$ 13,003
|
|
$ 14,943
|
|
$
8,643
|
|
$ 11,782
|
|
Depreciation and
Amortization by expense category
|
|
|
|
Three Months
Ended
|
|
($ in
thousands)
|
|
9/30/24
|
|
6/30/24
|
|
3/31/24
|
|
12/31/23
|
|
9/30/23
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$ 19,653
|
|
$ 20,087
|
|
$ 19,874
|
|
$ 18,952
|
|
$ 19,872
|
|
$ 18,134
|
|
$ 17,866
|
|
$ 17,341
|
|
General and
administrative
|
|
1,991
|
|
1,346
|
|
1,389
|
|
1,404
|
|
1,400
|
|
1,070
|
|
1,031
|
|
1,295
|
|
Total depreciation and
amortization
|
|
$ 21,644
|
|
$ 21,433
|
|
$ 21,263
|
|
$ 20,356
|
|
$ 21,272
|
|
$ 19,204
|
|
$ 18,897
|
|
$ 18,636
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/shutterstock-reports-third-quarter-2024-financial-results-302289361.html
SOURCE Shutterstock, Inc.