NEW
YORK, Aug. 1, 2023 /PRNewswire/ --
Shutterstock, Inc. (NYSE: SSTK) (the "Company"), a premier
partner for transformative brands, digital media and marketing
companies, today announced financial results for the second quarter
ended June 30, 2023.
Commenting on the Company's performance, Paul Hennessy, the Company's Chief Executive
Officer, said, "I'm pleased to report that, as reflected in our
second quarter results and our revised full year outlook,
Shutterstock is not only adapting but that it is thriving in this
dynamic environment. We recently signed a strategic multi-year
content and data partnership with Google, we acquired GIPHY to lead
the way in moment marketing and conversational content, and we are
embracing a culture of rapid & iterative experimentation when
it comes to optimizing our content business. At the same time,
having achieved record revenue and adjusted EBITDA on a
year-to-date basis, I'm pleased to report that we are increasing
our guidance on top and bottom line for the full year 2023."
Second Quarter 2023 highlights as compared to
Second Quarter 2022:
Financial Highlights
- Revenue increased 1% to $208.8
million.
- Income from operations decreased 66% to $8.7 million.
- Net income increased 157% to $50.0
million.
- Adjusted EBITDA increased 23% to $60.1
million.
- Net income per diluted share increased $0.84 to $1.37.
- Adjusted net income per diluted share increased $0.24 to $1.07.
- Operating cash flows decreased $7.0
million to $29.8 million.
- Free cash flow increased $11.8
million to $33.4 million.
Key Operating Metrics
- Subscribers increased to 556,000.
- Subscriber revenue increased to $87.4
million.
- Average revenue per customer increased to $374.
- Paid downloads decreased to 38.5 million.
- Revenue per download increased to $4.71.
- Image collection expanded to 734 million images.
- Footage collection expanded to 50 million clips.
SECOND QUARTER RESULTS
Revenue
Second quarter revenue of $208.8 million increased $2.0 million or 1% as compared to the second
quarter of 2022. Revenue generated through our E-commerce sales
channel decreased 12% as compared to the second quarter of 2022, to
$111.9 million, and represented
54% of total revenue in the second quarter of 2023. The decline in
E-commerce revenue was primarily driven by continued weakness in
new customer acquisition. Revenue from our Enterprise sales channel
increased 22% as compared to the second quarter of 2022, to
$96.9 million, and represented
46% of second quarter revenue in 2023. The increase in Enterprise
revenues was primarily driven by growth in our computer vision data
partnerships which generated $17.3 million during the second quarter,
compared to $2.2 million in the
second quarter of 2022.
Foreign currency fluctuations did not have a significant impact
on second quarter 2023 revenues.
Net income and net income per diluted share
Net income of $50.0 million
increased $30.6 million as compared
to $19.4 million for the second
quarter in 2022. Net income per diluted share was $1.37, as compared to $0.53 for the same period in 2022.
$25.9 million of the increase in
second quarter 2023 net income, or $0.71 per diluted share, is related to the
acquisition of Giphy, Inc. ("Giphy"), which was completed on
June 23, 2023. Giphy's divestiture was a result of a UK
Competition and Markets Authority's (the "CMA") regulatory order,
and concurrently with the closing of the transaction, the Company
and the seller entered into a transitional services agreement
pursuant to which the seller is responsible for certain costs
related to the retention of Giphy employees (the "Giphy Retention
Compensation"). The acquisition resulted in the recognition of a
$41.9 million non-taxable bargain
purchase gain. In addition, we also incurred $13.2 million of non-recurring, cash neutral,
compensation expenses, net of tax, resulting from payments made to
the Giphy workforce during the period and acquisition-related
transaction costs of $2.8 million,
net of tax.
Second quarter 2023 net income was also favorably impacted by
the quarter's revenue growth combined with a decline in operating
expenses, excluding the impact from the above-mentioned bargain
purchase gain, Giphy Retention Compensation and transaction
costs.
Adjusted net income per diluted share was $1.07 as compared to $0.83 for the second quarter of 2022, an increase
of $0.24 per diluted share.
Adjusted EBITDA
Adjusted EBITDA of $60.1 million
for the second quarter of 2023 increased by $11.1 million, or 23%, as compared to the
second quarter of 2022, due primarily to modest revenue growth
combined with lower expenses from prudent cost management. The
adjusted EBITDA margin of 28.8% for second quarter of 2023
increased by 511 basis points, as compared to 23.7% in the second
quarter of 2022.
SECOND QUARTER LIQUIDITY
Our cash and cash equivalents decreased by $8.7 million to $87.1 million at June 30, 2023, as
compared with $95.8 million as
of March 31, 2023. This decrease was
driven by $50.2 million used in
investing activities, partially offset by $29.8 million of net cash provided by our
operating activities and $12.7 million provided by financing
activities.
Net cash provided by our operating activities was driven by our
operating income, in addition to changes in the timing of cash
collections from our customers and payments pertaining to operating
expenses. Operating cash flows were unfavorably impacted by
recurring and non-recurring payments made to the Giphy workforce,
the reimbursement of which is reflected in Investing
Activities.
Cash used in investing activities primarily consists of
$53.7 million related to the
acquisition of Giphy and $12.2 million related to capital
expenditures and content acquisition, partially offset by
$15.8 million related to the
receipt of the Giphy Retention Compensation, as reimbursed by the
Giphy seller.
Cash provided by financing activities primarily consists of a
$30.0 million drawdown from our
Credit Facility, partially offset by $9.7 million related to the payment of the
quarterly cash dividend, $4.0 million paid for the repurchase of
common stock under our share repurchase program and $3.5 million paid in settlement of tax
withholding obligations related to employee stock-based
compensation awards.
Free cash flow was $33.4 million for the second quarter of
2023, an increase of $11.8 million from the second quarter of
2022.
QUARTERLY CASH DIVIDEND
During the three months ended June 30, 2023, the Company
declared and paid a cash dividend of $0.27 per common share or $9.7 million.
On July 17, 2023, the Board of Directors declared a
dividend of $0.27 per share of
outstanding common stock, payable on September 14, 2023 to
stockholders of record at the close of business on August 31,
2023.
KEY OPERATING METRICS
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
Subscribers (end of
period)(1)
|
|
556,000
|
|
368,000
|
|
556,000
|
|
368,000
|
Subscriber revenue (in
millions)(2)
|
|
$
87.4
|
|
$
84.7
|
|
$
178.0
|
|
$
170.1
|
|
|
|
|
|
|
|
|
|
Average revenue per
customer (last twelve months)(3)
|
|
$
374
|
|
$
359
|
|
$
374
|
|
$
359
|
Paid downloads (in
millions)(4)
|
|
38.5
|
|
43.4
|
|
81.2
|
|
88.0
|
Revenue per
download(5)
|
|
$
4.71
|
|
$
4.46
|
|
$
4.56
|
|
$
4.34
|
Content in our
collection (end of period, in millions)(6):
|
|
|
|
|
|
|
|
|
Images
|
|
734
|
|
511
|
|
734
|
|
511
|
Footage
clips
|
|
50
|
|
27
|
|
50
|
|
27
|
|
|
|
|
|
|
|
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.
|
2023 GUIDANCE
The Company increased its guidance for the full year 2023, to
the following:
- Revenue of $852 million to
$869 million, representing annual
growth of 3% to 5%.
- Adjusted EBITDA of between $227
million to $235 million.
- Adjusted net income per diluted share of between $4.00 to $4.17.
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 June 30,
2023, the Company also incurred $0.5 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 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 second quarter and full year
financial results during a teleconference today, August 1,
2023, 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/mwjpiz7e). 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 August 1, 2023 at approximately
10:30 AM Eastern Time.
ABOUT SHUTTERSTOCK
Shutterstock, Inc. (NYSE: SSTK) is a premier partner for
transformative brands, digital media and marketing companies,
empowering the world to create with confidence. 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 caption "2023
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" 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, risks related to the Giphy, Inc. transaction, such as
potential litigation; potential business disruption; the impact of
transaction costs; our ability to achieve the benefits of the
transaction, including monetization; our ability to effectively
integrate the acquired operations into our operations; our ability
to retain and hire key target personnel; and the effects of any
unknown liabilities; as well as 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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
208,840
|
|
$
206,872
|
|
$
424,120
|
|
$
406,004
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
84,416
|
|
77,019
|
|
162,579
|
|
146,470
|
Sales and
marketing
|
|
48,392
|
|
54,229
|
|
95,919
|
|
107,558
|
Product
development
|
|
29,218
|
|
17,162
|
|
44,624
|
|
30,788
|
General and
administrative
|
|
38,099
|
|
33,088
|
|
71,914
|
|
63,896
|
Total operating
expenses
|
|
200,125
|
|
181,498
|
|
375,036
|
|
348,712
|
Income from
operations
|
|
8,715
|
|
25,374
|
|
49,084
|
|
57,292
|
Bargain purchase
gain
|
|
41,940
|
|
—
|
|
41,940
|
|
—
|
Other income /
(expense), net
|
|
726
|
|
(2,661)
|
|
1,771
|
|
(1,903)
|
Income before income
taxes
|
|
51,381
|
|
22,713
|
|
92,795
|
|
55,389
|
Provision for income
taxes
|
|
1,368
|
|
3,268
|
|
9,939
|
|
9,372
|
Net income
|
|
$
50,013
|
|
$
19,445
|
|
$
82,856
|
|
$
46,017
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.39
|
|
$
0.54
|
|
$
2.31
|
|
$
1.27
|
Diluted
|
|
$
1.37
|
|
$
0.53
|
|
$
2.27
|
|
$
1.25
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
36,047
|
|
36,123
|
|
35,952
|
|
36,213
|
Diluted
|
|
36,406
|
|
36,578
|
|
36,490
|
|
36,890
|
Shutterstock, Inc.
Consolidated Balance
Sheets
(In thousands,
except par value amount)
(unaudited)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
87,146
|
|
$
115,154
|
Accounts receivable,
net of allowance of $5,641 and $5,830
|
|
61,715
|
|
67,249
|
Prepaid expenses and
other current assets
|
|
124,554
|
|
33,268
|
Total current
assets
|
|
273,415
|
|
215,671
|
Property and
equipment, net
|
|
59,434
|
|
54,548
|
Right-of-use
assets
|
|
17,233
|
|
17,593
|
Intangibles assets,
net
|
|
202,090
|
|
173,087
|
Goodwill
|
|
383,045
|
|
381,920
|
Deferred tax assets,
net
|
|
1,609
|
|
16,533
|
Other
assets
|
|
67,435
|
|
21,832
|
Total
assets
|
|
$
1,004,261
|
|
$
881,184
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
6,095
|
|
$
7,183
|
Accrued
expenses
|
|
112,231
|
|
89,387
|
Contributor royalties
payable
|
|
40,561
|
|
38,649
|
Deferred
revenue
|
|
207,483
|
|
187,070
|
Debt
|
|
30,000
|
|
50,000
|
Other current
liabilities
|
|
11,195
|
|
11,445
|
Total current
liabilities
|
|
407,565
|
|
383,734
|
Deferred tax
liability, net
|
|
17,255
|
|
4,465
|
Lease
liabilities
|
|
33,382
|
|
35,611
|
Other non-current
liabilities
|
|
26,552
|
|
9,892
|
Total
liabilities
|
|
484,754
|
|
433,702
|
Commitment and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value; 200,000 shares authorized; 39,884 and 39,605
shares
issued and 36,028 and
35,829 shares outstanding as of June 30, 2023 and December 31,
2022,
respectively
|
|
398
|
|
396
|
Treasury stock, at
cost; 3,856 and 3,776 shares as of June 30, 2023 and
December 31, 2022
|
|
(204,008)
|
|
(200,008)
|
Additional paid-in
capital
|
|
402,728
|
|
391,482
|
Accumulated other
comprehensive loss
|
|
(14,131)
|
|
(15,439)
|
Retained
earnings
|
|
334,520
|
|
271,051
|
Total stockholders'
equity
|
|
519,507
|
|
447,482
|
Total liabilities and
stockholders' equity
|
|
$
1,004,261
|
|
$
881,184
|
Shutterstock, Inc.
Consolidated
Statements of Cash Flows
(In thousands,
except par value amount) (unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
50,013
|
|
$
19,445
|
|
$
82,856
|
|
$
46,017
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
19,206
|
|
16,510
|
|
38,102
|
|
31,575
|
Deferred
taxes
|
|
831
|
|
(2,360)
|
|
(146)
|
|
(3,602)
|
Non-cash equity-based
compensation
|
|
14,943
|
|
7,043
|
|
23,586
|
|
14,869
|
Bad debt
expense
|
|
235
|
|
259
|
|
1,025
|
|
620
|
Bargain purchase
gain
|
|
(41,940)
|
|
—
|
|
(41,940)
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(13,459)
|
|
(3,128)
|
|
5,709
|
|
(762)
|
Prepaid expenses and
other current and non-current assets
|
|
(35,023)
|
|
169
|
|
(29,834)
|
|
(1,207)
|
Accounts payable and
other current and non-current liabilities
|
|
8,572
|
|
(2,263)
|
|
(4,144)
|
|
(28,980)
|
Contributor royalties
payable
|
|
(424)
|
|
2,683
|
|
1,822
|
|
3,713
|
Deferred
revenue
|
|
26,860
|
|
(1,507)
|
|
19,553
|
|
(2,669)
|
Net cash provided by
operating activities
|
|
$
29,814
|
|
$
36,851
|
|
$
96,589
|
|
$
59,574
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(10,490)
|
|
(9,022)
|
|
(22,870)
|
|
(20,797)
|
Business combination,
net of cash acquired
|
|
(53,721)
|
|
(212,096)
|
|
(53,721)
|
|
(212,096)
|
Cash received related
to Giphy Retention Compensation
|
|
15,752
|
|
—
|
|
15,752
|
|
—
|
Asset
acquisitions
|
|
—
|
|
(150)
|
|
—
|
|
(150)
|
Acquisition of
content
|
|
(1,725)
|
|
(6,265)
|
|
(5,252)
|
|
(6,999)
|
Security deposit
payment
|
|
(7)
|
|
(265)
|
|
(37)
|
|
(281)
|
Net cash used in
investing activities
|
|
$
(50,191)
|
|
$ (227,798)
|
|
$
(66,128)
|
|
$ (240,323)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Repurchase of treasury
shares
|
|
(4,000)
|
|
(18,565)
|
|
(4,000)
|
|
(56,937)
|
Proceeds from exercise
of stock options
|
|
—
|
|
568
|
|
3
|
|
568
|
Cash paid related to
settlement of employee taxes related to RSU vesting
|
|
(3,537)
|
|
(2,542)
|
|
(14,545)
|
|
(21,038)
|
Payment of cash
dividend
|
|
(9,725)
|
|
(8,665)
|
|
(19,387)
|
|
(17,371)
|
Proceeds from credit
facility
|
|
30,000
|
|
50,000
|
|
30,000
|
|
50,000
|
Payment of credit
facility
|
|
—
|
|
—
|
|
(50,000)
|
|
—
|
Payment of debt
issuance costs
|
|
—
|
|
(619)
|
|
—
|
|
(619)
|
Net cash provided by /
(used in) financing activities
|
|
$
12,738
|
|
$
20,177
|
|
$
(57,929)
|
|
$
(45,397)
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash
|
|
(1,047)
|
|
(3,296)
|
|
(540)
|
|
(3,825)
|
Net decrease in cash
and cash equivalents
|
|
(8,686)
|
|
(174,066)
|
|
(28,008)
|
|
(229,971)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
95,832
|
|
258,112
|
|
115,154
|
|
314,017
|
Cash and cash
equivalents, end of period
|
|
$
87,146
|
|
$
84,046
|
|
$
87,146
|
|
$
84,046
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
11,945
|
|
$
11,034
|
|
$ 6,795
|
|
$
12,700
|
Cash paid for
interest
|
|
1
|
|
90
|
|
429
|
|
90
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
|
$
50,013
|
|
$
19,445
|
|
$
82,856
|
|
$
46,017
|
Add / (less) Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
19,206
|
|
16,510
|
|
38,102
|
|
31,575
|
Non-cash equity-based
compensation
|
|
14,943
|
|
7,043
|
|
23,586
|
|
14,869
|
Bargain purchase
gain
|
|
(41,940)
|
|
—
|
|
(41,940)
|
|
—
|
Giphy Retention
Compensation Expense - non-recurring
|
|
17,191
|
|
—
|
|
17,191
|
|
—
|
Other adjustments, net
(1)
|
|
(726)
|
|
2,661
|
|
85
|
|
1,903
|
Provision for income
taxes
|
|
1,368
|
|
3,268
|
|
9,939
|
|
9,372
|
Adjusted
EBITDA
|
|
$
60,055
|
|
$
48,927
|
|
$
129,819
|
|
$
103,736
|
Adjusted EBITDA
margin
|
|
28.8 %
|
|
23.7 %
|
|
30.6 %
|
|
25.6 %
|
|
|
|
(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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
|
$
50,013
|
|
$
19,445
|
|
$
82,856
|
|
$
46,017
|
Add / (less) Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Non-cash equity-based
compensation
|
|
14,943
|
|
7,043
|
|
23,586
|
|
14,869
|
Tax effect of non-cash
equity-based compensation (2)
|
|
(3,512)
|
|
(1,655)
|
|
(5,543)
|
|
(3,493)
|
Acquisition-related
amortization expense (3)
|
|
8,370
|
|
7,110
|
|
16,528
|
|
13,155
|
Tax effect of
acquisition-related amortization expense (2)
|
|
(1,967)
|
|
(1,671)
|
|
(3,884)
|
|
(3,092)
|
Bargain purchase
gain
|
|
(41,940)
|
|
—
|
|
(41,940)
|
|
—
|
Giphy Retention
Compensation Expense - non-recurring
|
|
17,191
|
|
—
|
|
17,191
|
|
—
|
Tax effect of Giphy
Retention Compensation Expense - non-recurring
|
|
(4,040)
|
|
—
|
|
(4,040)
|
|
—
|
Other
|
|
—
|
|
—
|
|
1,856
|
|
—
|
Tax effect of
other(2)
|
|
—
|
|
—
|
|
(418)
|
|
—
|
Adjusted net
income
|
|
$
39,058
|
|
$
30,272
|
|
$
86,192
|
|
$
67,456
|
|
|
|
|
|
|
|
|
|
Net income per diluted
share
|
|
$
1.37
|
|
$
0.53
|
|
$
2.27
|
|
$
1.25
|
Adjusted net income per
diluted share
|
|
$
1.07
|
|
$
0.83
|
|
$
2.36
|
|
$
1.83
|
Weighted average
diluted shares
|
|
36,406
|
|
36,578
|
|
36,490
|
|
36,890
|
|
|
|
(2)
|
Statutory tax rates are
used to calculate the tax effect of the adjustments.
|
(3)
|
Of these amounts, $7.7
million and $6.6 million are included in cost of revenue for the
three months ended June 30, 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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total
Revenue
|
|
$
208,840
|
|
$
206,872
|
|
$
424,120
|
|
$
406,004
|
|
|
|
|
|
|
|
|
|
Revenue
growth
|
|
1 %
|
|
9 %
|
|
4 %
|
|
9 %
|
Revenue growth on a
constant currency basis
|
|
1 %
|
|
13 %
|
|
5 %
|
|
12 %
|
|
|
|
|
|
|
|
|
|
E-commerce
revenue
|
|
$
111,903
|
|
$
127,388
|
|
$
231,657
|
|
$
254,458
|
Revenue growth:
E-commerce
|
|
(12) %
|
|
6 %
|
|
(9) %
|
|
6 %
|
Revenue growth:
E-commerce on a constant currency basis
|
|
(12) %
|
|
9 %
|
|
(8) %
|
|
9 %
|
|
|
|
|
|
|
|
|
|
Enterprise
revenue1
|
|
$
96,937
|
|
$
79,484
|
|
$
192,463
|
|
$
151,546
|
Revenue growth:
Enterprise
|
|
22 %
|
|
15 %
|
|
27 %
|
|
13 %
|
Revenue growth:
Enterprise on a constant currency basis
|
|
22 %
|
|
19 %
|
|
28 %
|
|
16 %
|
1 - Enterprise revenue
includes $17.3 million and $2.2 million, related to our
computer vision data partnerships, for the three months ended
June 30, 2023 and 2022, respectively. Enterprise revenue
includes $34.0 million and $2.9 million, related to our
computer vision data partnerships, for the six months ended
June 30, 2023 and 2022, respectively.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
|
$
29,814
|
|
$
36,851
|
|
$
96,589
|
|
$
59,574
|
Capital
expenditures
|
|
(10,490)
|
|
(9,022)
|
|
(22,870)
|
|
(20,797)
|
Content
acquisition
|
|
(1,725)
|
|
(6,265)
|
|
(5,252)
|
|
(6,999)
|
Cash received related
to Giphy Retention Compensation
|
|
15,752
|
|
—
|
|
15,752
|
|
—
|
Free cash
flow
|
|
$
33,351
|
|
$
21,564
|
|
$
84,219
|
|
$
31,778
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
E-commerce
revenue
|
|
|
|
|
|
|
$
111,903
|
|
$
127,388
|
|
$
231,657
|
|
$
254,458
|
Enterprise
revenue
|
|
|
|
|
|
|
$
96,937
|
|
$
79,484
|
|
$
192,463
|
|
$
151,546
|
Total
revenue
|
|
|
|
|
|
|
$
208,840
|
|
$
206,872
|
|
$
424,120
|
|
$
406,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in total
deferred revenue
|
|
|
|
|
|
|
$
26,785
|
|
$
(4,086)
|
|
$
20,413
|
|
$
(6,331)
|
Total
billings
|
|
|
|
|
|
|
$
235,625
|
|
$
202,786
|
|
$
444,533
|
|
$
399,673
|
Shutterstock, Inc.
Supplemental
Financial Data
(unaudited)
|
Historical Operating
Metrics
|
|
|
Three Months
Ended
|
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
3/31/22
|
|
12/31/21
|
|
9/30/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers (end of
period, in thousands) (1)
|
|
556
|
|
559
|
|
586
|
|
607
|
|
368
|
|
359
|
|
343
|
|
336
|
Subscriber revenue (in
millions) (2)
|
|
$
87.4
|
|
$
90.6
|
|
$
88.8
|
|
$
87.7
|
|
$
84.7
|
|
$
85.4
|
|
$
81.4
|
|
$
81.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average revenue per
customer (last twelve months) (3)
|
|
$ 374
|
|
$ 356
|
|
$ 341
|
|
$ 329
|
|
$ 359
|
|
$ 355
|
|
$ 368
|
|
$ 361
|
Paid downloads (in
millions) (4)
|
|
38.5
|
|
42.7
|
|
42.5
|
|
42.8
|
|
43.4
|
|
44.6
|
|
45.0
|
|
44.3
|
Revenue per download
(5)
|
|
$
4.71
|
|
$
4.41
|
|
$
4.49
|
|
$
4.43
|
|
$
4.46
|
|
$
4.22
|
|
$
4.29
|
|
$
4.20
|
Content in our
collection (end of period, in millions): (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Images
|
|
734
|
|
731
|
|
719
|
|
527
|
|
511
|
|
471
|
|
464
|
|
453
|
Footage
clips
|
|
50
|
|
48
|
|
47
|
|
28
|
|
27
|
|
25
|
|
24
|
|
23
|
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)
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
3/31/22
|
|
12/31/21
|
|
9/30/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$ 306
|
|
$ 184
|
|
$ 160
|
|
$ 173
|
|
$ 156
|
|
$ 78
|
|
$ 54
|
|
$ (49)
|
Sales and
marketing
|
|
2,487
|
|
604
|
|
1,426
|
|
1,503
|
|
1,629
|
|
928
|
|
857
|
|
638
|
Product
development
|
|
4,221
|
|
2,448
|
|
3,085
|
|
2,957
|
|
2,557
|
|
1,781
|
|
2,017
|
|
1,675
|
General and
administrative
|
|
7,929
|
|
5,407
|
|
7,112
|
|
4,455
|
|
2,701
|
|
5,039
|
|
6,612
|
|
6,479
|
Total non-cash
equity-based compensation
|
|
$ 14,943
|
|
$
8,643
|
|
$ 11,783
|
|
$
9,088
|
|
$
7,043
|
|
$
7,826
|
|
$
9,540
|
|
$
8,743
|
Depreciation and
Amortization by expense category
|
|
|
Three Months
Ended
|
($ in
thousands)
|
|
6/30/23
|
|
3/31/23
|
|
12/31/22
|
|
9/30/22
|
|
6/30/22
|
|
3/31/22
|
|
12/31/21
|
|
9/30/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$ 18,134
|
|
$ 17,866
|
|
$ 17,341
|
|
$ 16,856
|
|
$ 15,172
|
|
$ 13,759
|
|
$ 13,682
|
|
$ 11,343
|
General and
administrative
|
|
1,070
|
|
1,031
|
|
1,295
|
|
1,404
|
|
1,338
|
|
1,305
|
|
1,358
|
|
2,146
|
Total depreciation and
amortization
|
|
$ 19,204
|
|
$ 18,897
|
|
$ 18,636
|
|
$ 18,260
|
|
$ 16,510
|
|
$ 15,064
|
|
$ 15,040
|
|
$ 13,489
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/shutterstock-reports-second-quarter-2023-financial-results-301889972.html
SOURCE Shutterstock, Inc.