NEW
YORK, Feb. 21, 2024 /PRNewswire/
-- Shutterstock, Inc. (NYSE: SSTK) (the "Company"), a
leading global creative platform connecting brands and businesses
to high-quality content, today announced financial results for the
full year and fourth quarter ended December 31, 2023.
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. On a constant currency basis, revenue increased
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 per share.
- Adjusted net income per diluted share increased 12% to
$4.35 per share.
- Operating cash flows decreased $17.9
million to $140.6
million.
- Free cash flow increased $40.1
million to $138.5
million.
Fourth Quarter 2023 highlights as compared to
Fourth Quarter 2022:
Financial Highlights
- Revenues decreased $0.5 million
to $217.2 million.
- Income from operations decreased 72% to $2.1 million.
- Net income / (loss) decreased 114% to a $1.0 million net loss.
- Adjusted EBITDA decreased 21% to $46.3
million.
- Net income per diluted share decreased $0.22 to $(0.03).
- Adjusted net income per diluted share decreased $0.33 to $0.72.
- Operating cash flows decreased $27.2
million to $33.9 million.
- Free cash flow decreased $3.6
million to $41.6 million.
FULL YEAR RESULTS
Revenue
Full year revenue of $874.6 million increased $46.8 million or 6% as compared to 2022.
Revenue generated through our Content product offering decreased
7% as compared to the full year 2022, to $737.3 million, and represented 84% of our
total revenue in 2023. The decline in Content revenue was primarily
driven by weakness in new customer acquisition. Revenue from our
Data, Distribution, and Services product offering increased 256% as
compared to 2022, to $137.3 million and represented 16% of our
total revenue in 2023. The increase in Data, Distribution, and
Services revenues was primarily driven by growth in our data
offering and revenue generated from Giphy.
On a constant currency basis, revenue increased 5% in 2023 as
compared to 2022. On a constant currency basis, Content revenues
decreased 7% and Data, Distribution, and Services revenues
increased by 256% in 2023, as compared to 2022.
Net income and Income per diluted share
Net income of $110.3 million
increased $34.2 million as compared
to $76.1 million for the full year
2022. Net income per diluted share was $3.04 as compared to $2.08 for the full year 2022. These increases
were driven by the growth in our Data, Distribution, and Services
product offering and a $50.3 million
bargain purchase gain recorded in connection with the Giphy
acquisition. In addition, 2022 was impacted by an $18.7 million impairment of leases and related
assets .
Adjusted net income per diluted share, which excludes the
bargain purchase in 2023 and the impairment of lease and related
assets in 2022, was $4.35 as compared
to $3.87 for the full year 2022.
Adjusted EBITDA
Adjusted EBITDA of $240.8 million
for 2023 increased $22.7 million
or 10% as compared to the full year 2022, attributable to growth in
revenues partially offset by operating expenses associated with our
acquisition of Giphy.
Adjusted EBITDA margin of 27.5% for 2023 increased by 120 basis
points, as compared to 26.3% for the full year 2022.
FOURTH QUARTER RESULTS
Revenue
Fourth quarter revenue was $217.2 million, which remained flat as
compared to the fourth quarter of 2022.
Revenue from our Content product offering decreased 10% as
compared to the fourth quarter of 2022, to $177.5 million, and represented 82% of our
total revenue in the fourth quarter of 2023. Revenue generated from
our Data, Distribution, and Services product offering increased
96.4% as compared to the fourth quarter of 2022, to $39.7 million, and represented 18% of fourth
quarter revenue in 2023.
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 $1.0
million decreased $8.1 million
as compared to net income of $7.0
million for the fourth quarter in 2022. Net (loss) income
per diluted share was ($0.03), as
compared to $0.19 for the same period
in 2022.
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 $0.72 as compared to $1.05 for the fourth quarter of 2022, an decrease
of $0.33 per diluted share.
Adjusted EBITDA
Adjusted EBITDA of $46.3 million
for the fourth quarter of 2023 decreased by $12.0 million, or 21%, as compared to the
fourth quarter of 2022, due primarily to higher operating expenses
operating expenses associated with our acquisition of Giphy. The
adjusted EBITDA margin of 21.3% for the fourth quarter of 2023
decreased by 550 basis points, as compared to 26.8% in the fourth
quarter of 2022.
LIQUIDITY
For the full year 2023, our cash and cash equivalents decreased
by $14.7 million to $100.5 million at December 31, 2023, as
compared with $115.2 million as
of December 31, 2022. This decrease was driven by $54.3 million used in investing activities
and $102.7 million used in
financing activities, partially offset by $140.6 million of net cash provided by our
operating activities. Net cash provided by our operating activities
was affected by our operating income, offset by payments made to
Giphy employees, which were fully reimbursed by Meta and reported
in investing cash flows as Giphy Retention Compensation, and
changes in the timing of cash receipts and payments pertaining to
our revenues and operating expenses.
Cash used in investing activities primarily consisted of capital
expenditures of $44.6 million for
internal-use software and website development costs, and
$11.1 million paid to acquire the
rights to distribute certain digital content in perpetuity. In
addition, cash of $53.7 million used
in the acquisition of Giphy was offset by $53.7 million of cash reimbursements from Meta
for Giphy Retention Compensation.
Cash used in financing activities primarily consisted of (i)
$38.7 million related to the payment
of the quarterly cash dividend; (ii) $28.2 million paid in connection with the
repurchase of common stock under our share repurchase program;
(iii) $15.8 million paid in
settlement of tax withholding obligations related to employee
stock-based compensation awards, and (iv) a $20.0 million reduction in our revolver.
Free cash flow was $138.5 million
for the full year 2023, an increase of $40.1
million from the full year 2022. This increase was primarily
driven by the increase in our adjusted EBITDA in addition to
changes in the timing of cash receipts and payments pertaining to
our revenues and operating expenses.
QUARTERLY CASH DIVIDEND
During the three months ended December 31, 2023, the
Company declared and paid a cash dividend of $0.27 per common share or $9.6 million.
On January 29, 2024, the Board of
Directors declared a dividend of $0.30 per share of outstanding common stock,
payable on March 14, 2024 to
stockholders of record at the close of business on February 29, 2024.
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 of 22%.
- EBITDA margin expansion from 28% to 30% and 2027 EBITDA of
$350 million.
- Cumulative Free Cash Flow of $800
million allocated to strategic acquisitions, dividends, and
share repurchases.
2024 GUIDANCE
The Company increased its guidance for the full year 2024, to
the following:
- Revenue of $875 million and
Adjusted EBITDA of $241 million.
unchanged from 2023.
- Adjusted net income per diluted share of between $4.15 to $4.30.
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 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, 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 $6.6 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 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.
Consolidated Statements of Operations
(In
thousands, except for per share
data)
(unaudited)
|
|
|
|
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.
Consolidated Balance Sheets
(In thousands,
except par value amount)
(unaudited)
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
100,490
|
|
$
115,154
|
|
Accounts receivable,
net of allowance of $6,335 and $5,830
|
|
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, $0.01
par value; 200,000 shares authorized; 39,981 and 39,605 shares
issued and 35,571 and 35,829 shares outstanding as of
December 31, 2023 and
December 31, 2022, respectively
|
|
399
|
|
396
|
|
Treasury stock, at
cost; 4,410 and 3,776 shares as of December 31, 2023 and
December 31,
2022
|
|
(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.
Consolidated Statements of Cash Flows
(In
thousands, except par value amount) (unaudited)
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
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)
|
|
$ (275,550)
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
$ (102,704)
|
|
$
(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 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
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 %
|
|
________________________________________________________________________________________
|
|
(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-
recurring
|
|
(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, $8.2
million and $7.5 million are included in cost of revenue for the
three months ended December 31, 2023 and 2022, respectively. The
remainder of acquisition-related amortization expense is included
in general and administrative expense in the Statement of
Operations.
|
|
|
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
currency basis
|
|
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.
Supplemental Financial
Data
(unaudited)
|
|
|
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
|
|
$ 11,988
|
|
$ 13,003
|
|
$ 14,943
|
|
$
8,643
|
|
$ 11,782
|
|
$
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
|
|
$ 18,952
|
|
$ 19,872
|
|
$ 18,134
|
|
$ 17,866
|
|
$ 17,341
|
|
$ 16,856
|
|
$ 15,172
|
|
$ 13,759
|
|
General and
administrative
|
|
1,404
|
|
1,400
|
|
1,070
|
|
1,031
|
|
1,295
|
|
1,404
|
|
1,338
|
|
1,305
|
|
Total depreciation and
amortization
|
|
$ 20,356
|
|
$ 21,272
|
|
$ 19,204
|
|
$ 18,897
|
|
$ 18,636
|
|
$ 18,260
|
|
$ 16,510
|
|
$ 15,064
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/shutterstock-reports-full-year-2023-and-fourth-quarter-financial-results-302067187.html
SOURCE Shutterstock, Inc.
