Shutterstock Reports Fourth Quarter and Full Year 2019 Financial Results

NEW YORK, Feb. 13, 2020 /PRNewswire/ -- Shutterstock, Inc. (NYSE: SSTK) (the "Company"), a leading global technology company offering a creative platform for high-quality content, tools and services, today announced financial results for the fourth quarter and full year ended December 31, 2019.

Commenting on the Company's performance, founder and CEO Jon Oringer said, "We ended 2019 with solid performance, achieving profitable revenue growth, generating significant cash flow and filling some key leadership roles. We also demonstrated the strong network effect of our platform, with our contributor base reaching a milestone of over $1 billion in earnings paid.

"We have a consistent and unique track record of profitable growth and robust cash flow generation. With our strong balance sheet and desire to return value to our shareholders, we are very pleased to announce that for the first time in our history as a public company, our board has authorized a quarterly cash dividend of $0.17 per share, effective beginning this quarter. Historically, we have maintained a significant cash balance for investment in our business and strategic opportunities and intend to continue to do so in the future, while delivering long-term value to our shareholders."

Fourth Quarter 2019 highlights as compared to Fourth Quarter 2018:

Key Operating Metrics

    --  Paid downloads increased 2% to 47.7 million.
    --  Revenue per download increased 1% to $3.44.
    --  Image collection expanded 30% to 314 million images.
    --  Footage collection expanded 30% to 17 million footage clips.

Financial Highlights

    --  Revenue increased 3% to $166.4 million. On a constant currency basis,
        revenue increased 3%.
    --  Net income decreased 71% to $4.4 million.
    --  Adjusted EBITDA decreased 29% to $24.1 million.
    --  Net income per diluted share decreased by $0.30 to $0.12.
    --  Adjusted net income per diluted share decreased by $0.33 to $0.26.

Full Year 2019 highlights as compared to Full Year 2018:

Key Operating Metrics

    --  Paid downloads increased 5% to 187.8 million.
    --  Revenue per download increased 1% to $3.43.

Financial Highlights

    --  Revenue increased 4% to $650.5 million. On a constant currency basis,
        revenue increased 6%.
    --  Net income decreased 63% to $20.1 million.
    --  Adjusted EBITDA decreased 8% to $96.3 million.
    --  Net income per diluted share decreased by $0.97 to $0.57.
    --  Adjusted net income per diluted share decreased by $0.34 to $1.23.

FOURTH QUARTER RESULTS

Revenue

Fourth quarter revenue of $166.4 million increased $4.3 million or 3% as compared to 2018. Revenue generated through our E-commerce sales channel increased 6% as compared to the fourth quarter of 2018, to $100.9 million, and represented 61% of total revenue in the fourth quarter of 2019. Revenue from our Enterprise sales channel decreased 2% as compared to the fourth quarter of 2018, to $65.5 million, and represented 39% of fourth quarter revenue in 2019. Foreign currency fluctuations did not have a significant impact on fourth quarter revenue.

Net income and Income per diluted share

Net income of $4.4 million, decreased $10.6 million as compared to $14.9 million for the fourth quarter in 2018. Net income per diluted share was $0.12, as compared to $0.42 for the same period in 2018. This decrease is primarily due to a reduction in income from operations in the fourth quarter of 2019 caused by higher spending in performance marketing initiatives and higher general and administrative expenses, largely attributable to investments made across cyber security, data science and analytics, and technology spend.

Adjusted net income per diluted share was $0.26 as compared to $0.59 for the fourth quarter of 2018, a decrease of 56%.

Adjusted EBITDA

Adjusted EBITDA of $24.1 million for the fourth quarter of 2019 decreased $9.8 million, or 29%, as compared to the fourth quarter of 2018, driven primarily by sales and marketing expenses which increased due to higher spending in performance marketing initiatives and higher general and administrative expenses, largely attributable to investments made across cyber security, data science and analytics, and technology spend.

FULL YEAR RESULTS

Revenue

Full year revenue of $650.5 million increased $27.3 million or 4% as compared to 2018, or 6% on a constant currency basis. Revenue generated through our E-commerce sales channel increased 7% as compared to the full year 2018, to $392.2 million, or 9% on a constant currency basis, and represented 60% of total revenue in 2019. Revenue from our Enterprise sales channel increased 1% as compared to 2018, to $258.3 million, or 3% on a constant currency basis, and represented 40% of total revenue in 2019.

Net income and Income per diluted share

Net income of $20.1 million decreased $34.6 million as compared to $54.7 million for the full year 2018. Net income per diluted share was $0.57 as compared to $1.54 for the full year 2018. This decrease is primarily due to a reduction in income from operations during 2019 caused by higher spending in performance marketing initiatives and higher general and administrative expenses, largely attributable to investments made across cyber security, data science and analytics, and technology spend and a gain recognized in 2018 on the sale of Webdam of $27.6 million, or $0.78 per diluted share, net of tax, partially offset by a 2018 impairment charge of $4.9 million, or $0.14 per diluted share, net of tax, related to our long-term investment in SilverHub Media Limited.

Adjusted net income per diluted share of $1.23 decreased by $0.34, as compared to $1.57 for the full year 2018.

Adjusted EBITDA

Adjusted EBITDA of $96.3 million for 2019 decreased $8.8 million or 8% as compared to the full year 2018, driven primarily by sales and marketing expenses which increased due to higher spending in performance marketing initiatives and higher general and administrative expenses, largely attributable to investments made across cyber security, data science and analytics, and technology spend.

LIQUIDITY

Our cash and cash equivalents increased by $72.4 million to $303.3 million at December 31, 2019, as compared with $230.9 million at December 31, 2018. This increase was driven by $102.6 million of net cash provided by our operating activities, partially offset by $27.2 million used in investing activities and $1.7 million used in financing activities.

Free cash flow was $73.2 million for 2019, an increase of $9.7 million from 2018. This change was primarily driven by lower capital expenditures.

QUARTERLY CASH DIVIDEND

On February 11, 2020, the Board of Directors approved the initiation of a quarterly cash dividend and declared a dividend of $0.17 per share of outstanding common stock, payable on March 19, 2020 to stockholders of record at the close of business on March 5, 2020. We currently expect to continue to pay comparable cash dividends on a quarterly basis in the future, subject to the final determination of our Board of Directors.

OPERATING METRICS


                                                          Three Months Ended December 31,                       Year Ended December 31,


                                                     2019              2018                        2019    2018



                                                              (in millions, except revenue per download)



     Paid downloads (during the period)(1)          47.7                           46.8                 187.8                          179.6



     Revenue per download (during the period) (2)  $3.44                          $3.40                 $3.43                          $3.40



     Content in our collection (end of period)(3):



     Images                                          314                            242                   314                            242



     Footage clips                                    17                             13                    17                             13


               (1) Paid downloads is the number of
                downloads that our customers make in a
                given period of our photographs,
                vectors, illustrations, footage or music
                tracks.  Paid downloads exclude custom
                content, re-downloads of content that a
                customer has downloaded in the past
                (which do not generate incremental
                revenue or contributor royalty expense)
                and downloads of content that are
                offered to customers for no charge,
                including our free image of the week.




               (2)  Revenue per download is the amount
                of content-related revenue recognized
                in a given period divided by the number
                of paid downloads in that period
                excluding revenue from custom content
                and the impact of revenue that is not
                derived from or associated with content
                licenses.




               (3) Represents images (photographs,
                vectors and illustrations) and footage
                (in number of clips) available to
                customers for commercial license on
                shutterstock.com at the end of the
                period. We exclude content from this
                collection metric that is not uploaded
                directly to our site but is available
                for license by our customers through an
                application program interface, custom
                content and certain content that may be
                licensed for editorial use only.

FINANCIAL OUTLOOK

The Company's current expectations for full year 2020, are as follows:

    --  Revenue of $665 million to $690 million, representing growth of 2% to
        6%.
    --  Adjusted EBITDA of between $100 million to $107 million, representing
        growth of 4% to 11%.
    --  Adjusted net income per diluted share of between $1.42 and $1.58,
        representing growth of 15% to 28%.

NON-GAAP FINANCIAL MEASURES

In addition to reporting results in accordance with United States generally accepted accounting principles (GAAP), Shutterstock also refers to adjusted EBITDA, adjusted net income, revenue growth (including by distribution channel) on a constant currency basis, revenue excluding the impact of Webdam (including on a constant currency basis), adjusted EBITDA margin and free cash flow.

Shutterstock defines adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, foreign currency transaction gains and losses, charges related to the impairment of a long-term investment asset, expenses related to long-term incentives and contingent consideration related to acquisitions, interest income and expense, income taxes and the gain on sale of Webdam; adjusted net income as net income adjusted for the impact of non-cash equity-based compensation, the amortization of acquisition-related intangible assets, expenses related to long-term incentives and contingent consideration related to acquisitions, the gain on sale of Webdam, charges related to the impairment of a long-term investment asset and the estimated tax impact of such adjustments; revenue growth (including by distribution channel) on a constant currency basis 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; revenue excluding the impact of Webdam as total Company revenue for each period presented less the amount of revenue generated by the Webdam business during that period; revenue growth excluding the impact of Webdam on a constant currency basis as total Company revenue for each period presented, less the amount of revenue generated by the Webdam business during that period utilizing fixed exchange rates for translating foreign currency revenues for both periods; adjusted EBITDA margin as the ratio of adjusted EBITDA to revenue; and free cash flow as cash provided by operating activities, adjusted for capital expenditures and content acquisition. These figures have not been calculated in accordance with GAAP and should be considered 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 net income, revenue growth (including by distribution channel) on a constant currency basis, revenue excluding the impact of Webdam (including on a constant currency basis), adjusted EBITDA margin and free cash flow are useful to investors to provide them with disclosures of Shutterstock's operating results on the same basis as that used by management. Additionally, management believes that adjusted EBITDA, adjusted EBITDA margin and adjusted net income 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; revenue growth (including by distribution channel) on a constant currency basis provides useful information to investors by eliminating the effect of foreign currency fluctuations that are not directly attributable to Shutterstock's operating performance; and revenue excluding the impact of Webdam (including on a constant currency basis, expressed as a percentage) provide useful information to investors by eliminating the impact of a historical revenue source that is not part of the Company's current business and, as applicable, also provides useful information to investors by eliminating the effect of foreign currency fluctuations that are not directly attributable to Shutterstock's ongoing business. Additionally, management believes that providing these non-GAAP financial measures enhances the comparability for investors in assessing Shutterstock's financial reporting. 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 property and equipment 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 net income, revenue growth (including by distribution channel) on a constant currency basis, revenue excluding the impact of Webdam (including on a constant currency basis), adjusted EBITDA margin and free cash flow, in conjunction with GAAP financial measures, as an integral part of managing the business and to: (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.

A reconciliation of the differences between adjusted EBITDA, adjusted net income, revenue excluding the impact of Webdam and free cash flow, and the most comparable financial measures calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" 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.

EARNINGS TELECONFERENCE INFORMATION

The Company will discuss its fourth quarter and full year financial results during a teleconference today, February 13, 2020, at 8:30 AM ET. The conference call can be accessed in the U.S. at (844) 634-1442 or outside the U.S. at (615) 247-0239 with the conference ID# 8793299. A live audio webcast of the call will also be available simultaneously at http://investor.shutterstock.com.

Following completion of the call, a recorded replay of the webcast will be available in the investor relations section of Shutterstock's website. A telephone replay of the call will also be available until February 20, 2020 in the U.S. at (855) 859-2056 or outside the U.S. at (404) 537-3406 with the conference ID# 8793299.

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

ABOUT SHUTTERSTOCK

Shutterstock, Inc. (NYSE: SSTK), directly and through its group subsidiaries, is a leading global provider of high-quality licensed photographs, vectors, illustrations, videos and music to businesses, marketing agencies and media organizations around the world. Working with its growing community of over 1 million contributors, Shutterstock adds hundreds of thousands of images each week, and currently has more than 310 million images and more than 17 million video clips available.

Headquartered in New York City, Shutterstock has offices around the world and customers in more than 150 countries. The company also owns Bigstock, a value-oriented stock media offering; Shutterstock Custom, a custom content creation platform; Offset, a high-end image collection; PremiumBeat, a curated royalty-free music library; and Shutterstock Editorial, a premier source of editorial images for the world's media.

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

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements regarding management's future business, future results of operations or financial condition, future dividends, new or planned features, products or services, management strategies and Shutterstock's expectations regarding financial outlook, future growth and profitability. You can identify forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "plan" and other similar expressions. However, not all forward-looking statements contain these words. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors including risks related to any changes to or the effects on liabilities, financial condition, future capital expenditures, revenue, expenses, net income or loss, synergies and future prospects; our inability to continue to attract and retain customers and contributors to our online marketplace for creative content; competitive factors; our inability to innovate technologically or develop, market and offer new products and services; costs related to litigation or infringement claims, indemnification claims and the inability to prevent misuse of our digital content; our inability to increase market awareness of Shutterstock and our products and services; our inability to effectively manage our growth; our inability to grow at historic growth rates or at all; technological interruptions that impair access to our websites; assertions by third parties of infringement of intellectual property rights by Shutterstock, our inability to effectively manage risks associated with operating internationally; our exposure to foreign exchange rate risk; our inability to address risks associated with sales to large corporate customers; government regulation of the internet; increasing regulation related to the handling of personal data; actions by governments to restrict access to our products and services; our inability to effectively expand our operations into new products, services and technologies; our inability to protect the confidential information of customers; increased tax liabilities associated with our worldwide operations, including our exposure to withholding, sales and transaction tax liabilities; the effect of the Tax Cuts and Jobs Act of 2017; general economic and political conditions worldwide; our inability to successfully integrate acquisitions and the associated technology and achieve operational efficiencies; and other factors and risks discussed under the caption "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in other documents that we 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,


                                                         2019                            2018                    2019                    2018






     Revenue                                                   $
           166,371                                      $
        162,072                         $
         650,523  $
        623,250





     Operating expenses:



     Cost of revenue                                  71,797                                      68,829                            278,176                        267,671



     Sales and marketing                              47,182                                      43,034                            181,730                        166,448



     Product development                              15,103                                      11,689                             57,216                         58,897



     General and administrative                       26,486                                      22,881                            113,246                         97,782




     Total operating expenses                        160,568                                     146,433                            630,368                        590,798




     Income from operations                            5,803                                      15,639                             20,155                         32,452



     Gain on Sale of Webdam                                                                                                                                      38,613



     Other income / (expense), net                     2,816                                       1,048                              4,761                        (4,952)




     Income before income taxes                        8,619                                      16,687                             24,916                         66,113



     Provision for income taxes                        4,266                                       1,774                              4,808                         11,426



     Net income                                                  $
           4,353                                       $
        14,913                          $
         20,108   $
        54,687






     Earnings per share



     Basic                                                        $
           0.12                                         $
        0.43                            $
         0.57     $
        1.57




     Diluted                                                      $
           0.12                                         $
        0.42                            $
         0.57     $
        1.54






     Weighted average common shares outstanding:



     Basic                                            35,478                                      35,047                             35,285                         34,935




     Diluted                                          35,786                                      35,421                             35,581                         35,420


                                                                                                       
         
                Shutterstock, Inc.

                                                                                                     
         
             Consolidated Balance Sheets

                                                                                                   
       
           (In thousands, except par value amount)

                                                                                                         
          
                (unaudited)




                                                                                                                                                       December 31, 2019                         December 31, 2018






              
                ASSETS



              Current assets:



              Cash and cash equivalents                                                                                                                                 $
       303,261                            $
       230,852



              Accounts receivable, net                                                                                                                           47,016                  41,028



              Prepaid expenses and other current assets                                                                                                          26,703                  34,841



              Total current assets                                                                                                                              376,980                 306,721



              Property and equipment, net                                                                                                                        58,834                  76,188



              Right-of-use assets                                                                                                                                45,453



              Intangibles assets, net                                                                                                                            26,669                  29,540



              Goodwill                                                                                                                                           88,974                  88,576



              Deferred tax assets, net                                                                                                                           14,387                  12,375



              Other assets                                                                                                                                       19,215                  18,088




              Total assets                                                                                                                                              $
       630,512                            $
       531,488






              
                LIABILITIES AND STOCKHOLDERS' EQUITY



              Current liabilities:



              Accounts payable                                                                                                                                            $
       6,104                              $
       7,212



              Accrued expenses                                                                                                                                   53,864                  51,385



              Contributor royalties payable                                                                                                                      25,193                  22,971



              Deferred revenue                                                                                                                                  141,922                 139,604



              Other liabilities                                                                                                                                  18,811                   2,131




              Total current liabilities                                                                                                                         245,894                 223,303



              Lease liabilities                                                                                                                                  47,313



              Other non-current liabilities                                                                                                                       9,160                  21,518




              Total liabilities                                                                                                                                 302,367                 244,821




              Commitment and contingencies



              Stockholders' equity:



              Common stock, $0.01 par value; 200,000 shares authorized; 38,055 and 37,618 shares                                                                    381                     376
    issued and 35,497 and 35,060 shares outstanding as of December 31, 2019 and


              December 31, 2018, respectively



              Treasury stock, at cost; 2,558 shares as of December 31, 2019 and December 31, 2018                                                             (100,027)              (100,027)



              Additional paid-in capital                                                                                                                        312,824                 291,710



              Accumulated other comprehensive loss                                                                                                              (6,220)                (6,471)



              Retained earnings                                                                                                                                 121,187                 101,079




              Total stockholders' equity                                                                                                                        328,145                 286,667




              Total liabilities and stockholders' equity                                                                                                                $
       630,512                            $
       531,488


                                                                                                                
              
                Shutterstock, Inc.

                                                                                             
              
                Reconciliation of Non-GAAP Financial Information to GAAP

                                                                                                   
              
                (In thousands, except per share information)

                                                                                                                    
              
                (unaudited)




      Adjusted EBITDA, adjusted net income, revenue growth (including by distribution channel) on a constant currency basis, revenue excluding the impact of Webdam (including on a constant currency basis) 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. We caution 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.




                                                                                                                   Three Months Ended December 31,                                       Year Ended December 31,


                                                                                                 2019                               2018                      2019                               2018




     Net income                                                                                         $
              4,353                                          $
              14,913                                          $
              20,108                                           $
        54,687



     Add / (less) Non-GAAP adjustments:



     Depreciation and amortization                                                            12,604                                         11,718                                          49,915                                         45,652



     Non-cash equity-based compensation                                                        4,931                                          5,875                                          22,815                                         23,869



     Other adjustments, net (1)                                                              (2,054)                                         (346)                                        (1,332)                                         8,093



     Provision for income taxes                                                                4,266                                          1,774                                           4,808                                         11,426



     Gain on Sale of Webdam                                                                                                                                                                                                            (38,613)



     Adjusted EBITDA                                                                                   $
              24,100                                          $
              33,934                                          $
              96,314                                          $
        105,114




     Adjusted EBITDA margin                                                                     14.5                                           20.9                                            14.8
                                                                                                    %                                             %                                              %                                16.9
            %







                                                                                                                   Three Months Ended December 31,                                       Year Ended December 31,


                                                                                                 2019                               2018                      2019                               2018




     Net income                                                                                         $
              4,353                                          $
              14,913                                          $
              20,108                                           $
        54,687



     Add / (less) Non-GAAP adjustments:



     Non-cash equity-based compensation                                                        4,931                                          5,875                                          22,815                                         23,869



     Tax effect of non-cash equity-based compensation (2)                                    (1,159)                                       (1,337)                                        (5,363)                                       (5,434)



     Acquisition-related amortization expense                                                    704                                            906                                           4,691                                          3,841



     Tax effect of acquisition-related amortization expense (2)                                (165)                                         (206)                                        (1,034)                                         (874)


      Acquisition-related long-term incentives and contingent consideration                       762                                            702                                           3,430                                          3,141


      Tax effect of acquisition-related long-term incentives and contingent
       consideration (2)                                                                        (202)                                         (238)                                          (910)                                         (832)



     Gain on Sale of Webdam                                                                                                                                                                                                            (38,613)



     Tax effect of gain on Sale of Webdam (2)                                                                                                  263                                                                                        10,996



     Impairment of long-term investment asset                                                                                                                                                                                             5,881



     Tax effect of impairment of long-term investment asset (2)                                                                                                                                                                           (999)



     Adjusted net income                                                                                $
              9,224                                          $
              20,878                                          $
              43,737                                           $
        55,663






     Net income per diluted share                                                                        $
              0.12                                            $
              0.42                                            $
              0.57                                             $
        1.54




     Adjusted net income per diluted share                                                               $
              0.26                                            $
              0.59                                            $
              1.23                                             $
        1.57






     Weighted average diluted shares                                                          35,786                                         35,421                                          35,581                                         35,420



              (1)              Other adjustments, net includes
                                  foreign currency transaction
                                  gains and losses, charges related
                                  to the impairment of a long-term
                                  investment asset, expenses
                                  related to long-term incentives
                                  and contingent consideration
                                  related to acquisitions, and
                                  interest income and expense.





              (2)              Tax effect reflects the estimated
                                  impact of the adjustment on the
                                  provision for income taxes.


                                                                                                         Three Months Ended December 31,                       Year Ended December 31,


                                                                                                2019                          2018               2019                        2018




              Total Revenues                                                                        $
          166,371                                  $
      162,072                      $
             650,523 $
      623,250



              Less: Revenue from the Webdam business(1)                                                                                                                                        (2,711)



              Revenue excluding the impact of Webdam                                                $
          166,371                                  $
      162,072                      $
             650,523 $
      620,539






              
                Revenue growth                                                3
           %                                 7
            %                   4
            %             12
            %



              
                Revenue growth on a constant currency basis                   3
           %                                 8
            %                   6
            %             11
            %



              
                Revenue growth excluding the impact of Webdam on a constant   3
           %                                11
            %                   6
            %             14
            %
    currency basis





              
                E-commerce revenues                                                      $
          100,902                                   $
      95,564                      $
             392,241 $
      365,730



              
                Revenue growth: E-commerce                                    6
           %                                 9
            %                   7
            %             10
            %



              
                Revenue growth: E-commerce on a constant currency basis       6
           %                                10
            %                   9
            %              9
            %





              
                Enterprise revenues                                                       $
          65,469                                   $
      66,508                      $
             258,282 $
      254,809



              
                Revenue growth: Enterprise                                  (2)
           %                                12
            %                   1
            %             22
            %



              
                Revenue growth: Enterprise on a constant currency basis                         %                       13
            %                   3
            %             21
            %






                                                                                                         Three Months Ended December 31,                       Year Ended December 31,


                                                                                                2019                          2018               2019                        2018




              Net cash provided by operating activities                                              $
          25,626                                   $
      33,685                      $
             102,646 $
      102,202



              Capital expenditures                                                          (6,534)                                     (5,344)                      (26,081)                 (34,890)



              Content acquisition                                                           (1,448)                                     (1,016)                       (3,344)                  (3,838)




              Free cash flow                                                                         $
          17,644                                   $
      27,325                       $
             73,221  $
      63,474



              (1)              On February 26, 2018, the
                                  Company completed the Sale
                                  of Webdam. 2018 amounts
                                  include revenue earned
                                  during the period from
                                  January 1, 2018 through
                                  February 26, 2018.


                                                                                                                                                  
              
                Shutterstock, Inc.

                                                                                                                                             
              
                Supplemental Financial Data

                                                                                                                                                     
              
                (unaudited)





     
                Historical Operating Metrics




                                                                                                                      
       
                Three Months Ended


                                                          12/31/19           9/30/19      6/30/19             3/31/19                              12/31/18                                      9/30/18 6/30/18               3/31/18      12/31/17



                                                                                                            
            
         (in millions, except revenue per download)



     Number of paid downloads                                47.7                   46.3                          46.6                                                       47.2                              46.8                   43.9                    45.2           43.7     43.9



     Revenue per download (1)(5)                                   $
      3.44                       $
      3.40                                                      $
              3.44                                     $
      3.42                        $
      3.40       $
         3.40             $
      3.41  $
      3.40  $
      3.33



     Content in our collection (end of period): (2)



     Images                                                   314                    297                           280                                                        260                               242                    221                     204            187      170



     Footage                                                   17                     16                            15                                                         14                                13                     12                      11             10        9







     
                Historical Revenue by Sales Channel(3)




                                                                                                                      
       
                Three Months Ended


                                                          12/31/19           9/30/19      6/30/19             3/31/19                              12/31/18                                      9/30/18 6/30/18               3/31/18      12/31/17



                                                                                                                        
        
                (in millions)



     E-commerce                                                   $
      100.9                       $
      96.2                                                      $
              97.0                                     $
      98.1                        $
      95.6       $
         88.7             $
      91.7  $
      89.7  $
      87.8



     Enterprise                                              65.5                   62.8                          64.7                                                       65.2                              66.5                   62.9                    64.9           60.6     59.3



     Other(4)                                                                                                                                                                                                                                                          2.7        4.7



     Total Revenue(5)                                             $
      166.4                      $
      159.1                                                     $
              161.7                                    $
      163.3                       $
      162.1      $
         151.6            $
      156.6 $
      153.0 $
      151.8



              (1)              Revenue per download is defined as the
                                  amount of revenue recognized in a given
                                  period divided by the number of paid
                                  downloads in that period excluding
                                  revenue from custom content and the
                                  impact of revenue that is not derived
                                  from or associated with content
                                  licenses.





              (2)              Images (photographs, vectors and
                                  illustrations) and footage available on
                                  shutterstock.com at the end of the
                                  period. We exclude certain content
                                  available to customers, including custom
                                  content and content that may be licensed
                                  for editorial use only.





              (3)              Certain amounts in the table may not foot
                                  due to rounding.





              (4)              On February 26, 2018, the Company
                                  completed the Sale of Webdam. This table
                                  includes revenue earned during 2017 and
                                  for the period from January 1, 2018
                                  through February 26, 2018.





              (5)              Effective January 1, 2018, the Company
                                  adopted new revenue recognition
                                  accounting guidance using a modified
                                  retrospective approach. Historical
                                  revenue totals reflect those previously
                                  reported and have not been restated.
                                  Historical presentation of the
                                  allocation of the revenue by sales
                                  channel for periods prior to January 1,
                                  2018 has been adjusted to conform to
                                  current presentation.

View original content to download multimedia:http://www.prnewswire.com/news-releases/shutterstock-reports-fourth-quarter-and-full-year-2019-financial-results-301004212.html

SOURCE Shutterstock, Inc.