Release Details

- Third quarter revenue increased 41% from prior year to $83.7 million
- Adjusted EBITDA increased 36% to $17.3 million
- Quarterly paid downloads increased 23% to 31.2 million
- Revenue per download increased 13% to $2.65
- Image collection grew 44%; currently exceeds 44 million images and 2.1 million video clips

NEW YORK, Nov. 6, 2014 /PRNewswire/ -- Shutterstock, Inc. (NYSE: SSTK), a leading global provider of commercial digital imagery and music, today announced financial results for the third quarter ended September 30, 2014.  

"In the third quarter, we achieved strong growth due to our continued focus on providing an intuitive and efficient marketplace for businesses and creative professionals," said Founder and CEO Jon Oringer.

Operating Metrics

Revenue

Revenue for the third quarter of 2014 was $83.7 million, a 41% increase from $59.6 million in the third quarter of 2013. 

Net Income

Net income for the third quarter of 2014 was $5.3 million, as compared to $6.2 million in the third quarter of 2013. Net income available to common stockholders for the third quarter of 2014 was $5.3 million or $0.15 per share on a fully diluted basis, as compared to $6.2 million or $0.18 per share on a fully diluted basis in the third quarter of 2013.

Non-GAAP net income for the third quarter of 2014 was $9.5 million or $0.26 per share, as compared to $7.3 million or $0.21 per share in the third quarter of 2013.  Non-GAAP net income is defined as net income excluding the after tax impact of non-cash equity-based compensation.

Adjusted EBITDA

Adjusted EBITDA for the third quarter of 2014 was $17.3 million, as compared to $12.8 million in the third quarter of 2013.  Adjusted EBITDA is defined as net income adjusted for interest income/(expense), income taxes, depreciation, amortization, disposals and non-cash equity-based compensation.

Cash

The Company's cash and cash equivalents and short term investments balance was $260.5 million at September 30, 2014, as compared to $209.8 million as of December 31, 2013.  The Company generated $22.7 million of cash from operations in the third quarter, as compared to $14.6 million in the third quarter of 2013.

Also, during the third quarter, the Company incurred planned capital expenditures related primarily to the purchase of computer servers and networking equipment in the amount of $1.9 million.

Free cash flow for the third quarter of 2014 was $20.9 million, as compared to $12.8 million in the third quarter of 2013.  Free cash flow is defined as cash provided by/(used in) operating activities adjusted for capital expenditures and interest income/(expense).

Financial Outlook

The Company's current financial and operating expectations for the fourth quarter of 2014, full year 2014 and full year 2015 are as follows:

Fourth Quarter 2014

• Revenue of $90 - $92 million
• Adjusted EBITDA of $19.5 - $21.5 million
• Non-cash equity-based compensation expense of approximately $7 million
• An effective tax rate of approximately 40%
• Capital expenditures of approximately $3 million

Full Year 2014

• Revenue of $326 - $329 million
• Adjusted EBITDA of  $68.0 - $69.5 million
• Non-cash equity-based compensation expense of approximately $23 million
• An effective tax rate of approximately 40%
• Capital expenditures of approximately $20 million

Full Year 2015

• Revenue of $430 - $435 million
• Adjusted EBITDA of  $94 - $98 million
• Non-cash equity-based compensation expense of approximately $30 million
• Capital expenditures of approximately $16 million

Earnings Teleconference Information

The Company will discuss its third quarter 2014 financial results during a teleconference today, November 6, 2014, at 5:00 PM ET.  The conference call can be accessed at (800) 591-6942 or (617) 614-4909 (outside the US), conference ID# 176 306 93.  The call will also be broadcast simultaneously at http://investor.shutterstock.com.

Following completion of the call, a recorded replay of the webcast will be available on Shutterstock's website.  To listen to the telephone replay, call toll-free (888) 286-8010 or (617) 801-6888 (outside the US), conference ID# 680 144 85. The telephone replay will be available from 9:00 PM ET November 6 through November 13, 2014. 

Additional investor information can be accessed at http://investor.shutterstock.com.

Non-GAAP Financial Measures

Shutterstock considers adjusted EBITDA, non-GAAP net income, and free cash flow to be important financial indicators of the Company's operational strength and the performance of its business. Shutterstock defines adjusted EBITDA as net income adjusted for interest income/(expense), income taxes, depreciation, amortization and non-cash equity-based compensation; non-GAAP net income as net income excluding the after tax impact of non-cash equity-based compensation; and free cash flow as cash provided by/(used in) operating activities adjusted for capital expenditures and interest income/(expense). These figures are non-GAAP financial measures and should be considered in addition to results prepared in accordance with generally accepted accounting principles (GAAP), and should not be considered as a substitute for, or superior to, GAAP results. In addition, adjusted EBITDA, non-GAAP net income, and free cash flow should not be construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.

A reconciliation of the differences between adjusted EBITDA, non-GAAP net income, and free cash flow, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Consolidated Statements of Cash Flows included below.

Historical Operating Metrics

 

Non-Cash Equity-Based Compensation

Included in the accompanying financial results are expenses related to non-cash equity-based compensation, as follows (in thousands):

 

Amortization of Intangible Assets and Depreciation of Property and Equipment

Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):

 

Included in the accompanying financial results are expenses related to the depreciation of property and equipment, as follows (in thousands):

 

About Shutterstock

Shutterstock, Inc. (NYSE: SSTK) is a leading global provider of high-quality licensed photographs, vectors, illustrations, video footage and music to businesses, marketing agencies and media organizations around the world. Working with its growing community of over 60,000 contributors, Shutterstock adds hundreds of thousands of images each week, and currently has available more than 44 million images and 2.1 million video clips.

Headquartered in New York City, with offices in Amsterdam, Berlin, Chicago, Denver, London, Paris and San Francisco, Shutterstock has customers in more than 150 countries. The Company owns Bigstock, a value-oriented stock media agency; Offset, a high-end image collection; Skillfeed, an online marketplace for learning; and WebDAM, a leading provider of hosted digital asset management tools.

For more information, please visit http://www.shutterstock.com, and follow Shutterstock on Twitter and on Facebook.

Safe Harbor Provision

The statements contained in this press release that are not purely historical are forward looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding the Company's expectations, predictions, beliefs, hopes, intentions or strategies regarding the future.  Forward looking statements include statements regarding the Company's business strategy, timing of, and plans for, the introduction of new products and enhancements, future sales, market growth and direction, competition, market share, revenue growth, operating margins and profitability.  All forward looking statements included in this document are based upon information available to the Company as of the date hereof.  Actual events or results could differ materially from those contained in the Company's current projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change prior to the end of the quarter. Although these expectations may change, the Company assumes no obligation to update any such forward looking statement, whether as a result of new information, future developments or otherwise.  Factors that could cause or contribute to such differences include the Company's inability to continue to attract customers and contributors to its online marketplace for commercial digital imagery; a decrease in repeat customer purchases or in content contributed to our online marketplace; the Company's inability to successfully operate in a new and rapidly changing market and to evaluate its future prospects; competitive factors; the Company's inability to prevent the misuse of its imagery; assertions by third parties of infringement or other violations of intellectual property rights by the Company; the Company's inability to increase market awareness of the Company and its services; the Company's inability to effectively manage its growth; the Company's inability to increase the percentage of its revenues that come from larger companies; the Company's inability to continue expansion into international markets; various income tax and other tax liabilities; failure to respond to technological changes or upgrade the Company's website and technology systems; failure to adequately protect the Company's intellectual property; general economic conditions worldwide; and other factors and risks discussed under the heading "Risk Factors" in the Company's latest Annual Report on Form 10K filed on February 28, 2014, and other reports filed by the Company from time to time with the Securities and Exchange Commission.  Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

 

 

 

 

SOURCE Shutterstock, Inc.

Investor Contact: Denise Garcia, ICR, denise.garcia@icrinc.com; Media Contact: Jennifer Bewley, Shutterstock, Inc., 917 563 4991, press@shutterstock.com