SSTK - Earnings call transcript Q4 2021

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Operator

0:03 Good day. And thank you for standing by. Welcome to the Fourth Quarter 2021 Shutterstock Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session [Operator Instructions]. like Chris the Relations Suh, Development. now your over and would today, speaker Vice I to conference hand to Corporate X:XX President, Investor go Please ahead.

Chris Suh

us and X:XX call. you morning Victor. fourth everyone Thanks, for XXXX Good joining for earnings Shutterstock quarter thank

more on today today statements, Pavlovsky, will Shutterstock's COVID-XX hear Financial success Yahes, Chief Officer; in acquired results acquire operations, Jarrod may Chief you please is our to the Stan without including us of limitation, differ and of including our our future the recently Please impact of effects businesses information SEC trends the from note our integrate file new offerings, and in acquisitions Executive into and risk reports information, the our have Actual the future XX-K. will refer and business, materially during our Officer. Shutterstock's investments filed performance forward-looking long-term to releases most that we guidance. Joining consist product forecast. the discussion or existing discussed today's factors our XXXX of and and profitability, long-term our impact strategy, margins from the growth, consummate with some ability and of could including our business, time-to-time, targets existing we the financial our or For X:XX press

diluted over actual GAAP I'll growth on materially press billings adjusted XX-K. today, these net included important results can X:XX that, measures revenue discussing cash today's For constant any margin, differ turn EBITDA tables with With non-GAAP be that call. statements cause income call adjusted adjusted measures net and a to Reconciliations comparable be Stan. release the to on certain and by discussions of our to and of including this free we We'll most in per income, found adjusted financial X:XX the share, basis, directly channel risk could factors including forward-looking from the distribution non-GAAP EBITDA measures flow. make currency in financial

Stan Pavlovsky

we And Shutterstock Chris. for joining talk how the Thanks, completed coupled XXXX. year discussing XXXX, investments growth quarter in have Shutterstock’s growth with revenue the Today, be well our us results And in you for into the for X:XX acquisitions extremely XXXX, thank business organic also XXXX for morning, annual since earnings Shutterstock’s we'll our XX% about XXXX. We'll full rates the highest positioned us XXXX. good call. fourth everyone.

XXXX, grew organic in XX% our In basis. or enterprise experienced in an XXXX. we growth return Meanwhile, after driven fourth XX% video and grew the revenue over and subscriber and channel music subscription declining outsized on growth XXXX, e-commerce across X:XX channel Our in XX% in growth e-commerce revenue year-over-year, by XX%. XX% and image resulting growth products, e-commerce quarter, XX% our subscription In X:XX growth. grew our channel to

launches in channel slowdown we in In reflected That of to of launched quarter, As and a X:XX greater was product products e-commerce Further, discussed XXXX. customer subscription transition we an basis. products months over dedicated as the by slowdown focus providing with our year. quarter, on organic last image, one we several strong was great was course softness ecommerce ecommerce first introducing of gears the we for within levels front, on value, launches a in relative that e-commerce new partially which low-single model, the the to we plan course in traction project asset segment, e-commerce subscription mixed with seen channel. organic on XXXX. aim the in the our Shutterstock’s growth content our digits lapping our use and flexibility I'll offers the ad-hoc October Within addition, project said, enterprise library reflected are new the X:XX subscription access in of music in in have year, switch normalized launched FLEX increasingly led which we XX to to customization. video over transaction returning products new XXXX, our XX growth seeing subscription, last new the product be more channel, now which and result expect of to we'll enterprise

changes, growing us terms on commercial with X:XX year. revenue Shutterstock things vision Our enterprise results greater focus put a our accounts, have in Growth than our which on studios – streams was Shutterstock we've with bolstered by strategy by for our FLEX to presence the our SMBs, better been reflected approach. our our image strategic core to years past enterprise and a return plans have rather context, and channel growth the two centric X% enterprise declining tangible SMB and grew also powerful organizational with our We to focus redefining streams a XX% seen included after driven approach strength revenue on over scale. customer in and progress footage momentum computer the a journey of made in align and the reinvigorate enterprise in pleased To a region based invested to in sharper we channel go-to-market and our incentive systems strategy XXXX, channel. commercial offering. largest and including product our X:XX go-to-market our business, X:XX enable channel yielded We subscription-based several solutions, growth very with are which in and products our further our scaling to in and business customers prior expanding Adjusting Our offering. studios. our centric

out product FLEX we strategic I and like premium, provide strong growth going of lay to seeing proof this forward to solutions our would momentum, happy plan. our some to point our to includes X:XX studios progress. in the bookings sustainable and offerings as that Besides additional that suite see And such in XD channel We're enterprise points indicators that several new content. XXXX. and Our expect we're revenue report success

to million in than grew with to low our Reflecting workflow. the our many AOV product and ahead, XD up retention The in studio bookings value last design. across adoption in products mid enterprise film video deals dynamic asset industry visual average include Looking enterprise our roadmap sell stemming exciting on acquisition the improved to XXXX QX of bookings, TurboSquid. various from SMBs bookings for from content consummated and number architecture games, XX% solutions increasing in an cases, will steep strong is solutions leverage in new XXXX, and growth multi FLEX XD revenues X:XX XXXX. acquisitions stickier to has which for in that cross we following use percent increased continue and revenues TV product a effects Enterprise bookings subscription objects from approached art, First, upsell the XXs customers total marketplace XXXX foundational an These TurboSquid’s we launch customer rates ranging deeply seen from of including include year, used from see $XXX,XXX. XX% XXXX. products, run have our will XXXX. as we deployed in which XD type recently, and X:XX rate captured in in ourselves a of PicMonkey’s characters XXXX, $XX customers. customers in NFT's, and be services. environments. in basis, our and as and into XD our The the of embedding almost ramp strategic can where in be very been our a works by to strategy in relationships subscription creating XXs initial leading these we're subscription intuitive metaverse more assets excited a FLEX in the downloaded More the $XXX,XXX annual with about greater XX% subscription of of platform and enterprise X:XX element beautiful for

rank in reimagined and our use audience. search and this transform We that believe AI X:XX introduction customers on application enterprise as the specific introducing year. easy itself AI in generate professional use target based a marketing flow manifest AI to by fueled Shutterstock discovery assets with We an previous insights, designs X:XX finally, easier industry we've business metrics. will insights allow that a creative to succeed. of also for create allow our we're to our a three direct that marketers believe applications. which part workflow quarters, and insights to the acquired the these And Shutterstock our content further create journey As workflow a beautiful enhancements leveraging introducing content will a predictive to analytics to and creators will a the experience. results, into goals, offerings will to on will allowing and customers e-commerce powered of Shutterstock include be on innovations content, communicated that creative impact their measurable driven our ideas best chance data of have in transform and will giving intuition predictive insights platform, back their form customers We

I our For to are believe ultimately increase powered in a example, which customers, we such to our leave In revenue that tools will understand engagement revenue non-professional in deeply drive and inherently in creative on. adding base. an track into will our making as to – believe subscription Before takeaways. to customer embedding higher I'd make attract the XX:XX greater an expect offering in we you investors XX:XX we help ourselves segment. will workflow over retention to that better of customer’s stickier, Jarrod, into believe more initiatives addition, the result to rates. visibility be further we order have have an progress later well-positioned strategic stability And and Investor enthusiast creative we call We the with new like expect believe new high-margin PicMonkey finally, by recurring we've the this we that year, few power Day our revenue, and we embarked turn types

a accelerated encouraged platform, Secondly, about leading and content, continued cylinders and First, to journey with are results into data in about profitability, dynamic great XXXX. subscription revenue and a transform XXXX. capital we XX:XX growth, about thrilled We XXXX. to to respect our what's to thrilled progress on into financial acquisition our solution team firing for intent towards And and in enhanced and we to what Shutterstock feel all now I'll and And our for achieved feel pivot in enterprise creative into our the and furthered channel that, XX:XX Jarrod. workflow leveraging an Shutterstock, we by business, exciting the business applications. XXXX. with ahead have lastly, I'm strategy over strategic It's XXXX. momentum, turn I'm more even us we offering call going time And our

Jarrod Yahes

good and Stan, you, Thank morning, everyone. XX:XX

fourth XX% of of a quarter or Shutterstock’s with enterprise basis currency growth XXXX constant a growth XX%. year full the the growth XX% For Revenues e-commerce grew basis. revenue and on on XX% currency XX% was in constant or XX%

our headwind grew US soften to Foreign margins XX:XX The full-year bookings as the studios. enterprise accelerated was the quarter euro XXX the a versus revenue exchange in year, continued have XX% XX% growth points channel to results, great with XX.X%, dollar. XX.X% slight growth momentum in E-commerce and driven and revenue the fourth from as by compared to earlier Shutterstock strong quarter at this and basis continued pound gross were up in XXXX.

with marketing, fourth resulted a as Backing sales of to driven XX% XX% costs full-year in XX:XX due revenue compensation as investment of XXX expenses X%. development as increase compared quarter quarter quarter. the actually largely benefited in third largely well million of with around fourth was revenue as in acquisitions. fourth revenue XXX line G&A remaining This from year. the to from increase engineers, campaign. marketing revenue For full first and of and as third approximately largely full-year spend, revenue, increased XX% in Sales previously expense campaign. expectations gross XX% quarter, a our and we XX:XX at compared basis Product year-over-year, XX% was our basis the quarter XX% On associated our guidance of lower to the brand points of the costs compensation discussed marketing deployment percentage fourth the debt from revenue points with with amortization, marketing as basis margins remained Margin previewed second our by recent M&A were XX% the as of would approximately in incremental margins percentage consistent XXXX. to XX:XX of quarter expense. and expense percentage expense out down higher in XX:XX Adjusted was quarter G&A Gross higher On to million by constant basis related improved our flat points fourth qX due of additional our over our noncash XXXX, acquisitions, up to margin additional prior recent last hiring at brand development XX%. of increase EBITDA been marketing XXXX. by $X and increased amortization EBITDA associated X% quarter. bad G&A in by driven For from XXX of expenses quarter expense fourth XX.X% declined in basis. compared year-over-year. with $X.X XXXX, as remain recent a were the the spend, have of a in a to sequential stock year product Absent of in the of the a QX

grew from to XXXX, by exceeded to $XXX Shutterstock in margin year our EBITDA meaningfully year-over-year million. million XX:XX XX% we $XXX from XX% For points increased and guidance EBITDA XXXX. the margins basis XXX XX.X% full

fourth $X.XX earnings and share So per share diluted per adjusted the was earnings was diluted $X.XX. quarter GAAP

share we earnings in quarter, Our fourth $XX end generated almost of adjusted quarter from full by of deferred year, million cash, in of enterprise a growth XX% year-over-year the indicator and our XX%. from leading of At balance revenue the CapEx, deferred quarter represents from PicMonkey, respectively. recognized more deferred when the $XXX future $X.XX the $XXX X million representing $XX which is dividend grew XXXX, of our have growth million revenue GAAP Even at the For of in partially XX:XX the XX. we balance. $XXX to share million we million excluding half in increase quarter. revenues positive This we of the over cash from million cash XXXX. earnings $X.XX, $X.XX confidence fourth balance channel, the X our December September announced XXXX, strong revenue growth revenue per growth up sheet We flow to On XX:XX of and was of of share of March quarterly will per third our million XX, increased increase paid XX% attributable $XX paid flows. flows, operating XX:XX quarterly was cash in was business This representing per XX, January Turning revenue be as in for cash the deferred and in and dividend well the repurchases. diluted million had $XX as from a share, XXXX. balance and to the which offset our results million on XX% XX% than

for to With full-year each share We plan XX:XX will grow continue basis, XXX,XXX periodically and time. for revisit quarter to to over repurchased it on shares to our be the a the million during day continue buyback we and the quarterly shares in million. market we $XX respect dividend program, repurchased $XX further $XXX,XXX buying,

this increase million annum share allow to prices, We program per shares $XXX growing the over M&A. current repurchase outstanding from buyback By our expect annual authorization. our of active consistent dividend repurchase remaining XX:XX full on the our $XX to the us communicated share available million and higher current share basis, to under shares time, up At year, from and each X% repurchasing X%. will buyback a previously approximately

XX% the downloads overall download increased $XXX. respectively, meaningfully company. $X.XX growth and revenue rate In Our annual increased download. XX%, to revenue faster to XX:XX operating revenue subscriber in Paid operating returns our than our exceed XX% and provide and by average goal fourth is per the by by subscriber compounding the count to for subscriber revenues subscriber revenue XXXX, organic customer of X%, investors count increased our XX% quarter, metrics Turning XX:XX and that were to increased per increased XX%, per key growth profit. down by

that, the is our multi market drivers of channel. reception our strong One mentioned in enterprise subscriptions Stan of for the as FLEX asset

last On back XX the e-commerce. launch of our in FLEX quarter

to We multiple year. products Finally, part also guidance. of introduce new the early plan turning our in this to XX:XX FLEX

Revenue million, of basis growth. points. XX Adjusted annual full-year the X% to $XXX $XXX as are revenue flat from share million, ranging million expectations with of $XXX our margins growth million throughout digit Adjusted the of XX% EBITDA earnings $X.XX to up to for revenue XXXX, the follows. of For representing $XXX per high year to quarter. double-digit enterprise will XX:XX revenue will of we XXXX, the start accelerating growth In in high-single growth $X.XX. to year, digit single and revenue with terms believe revenue composition e-commerce exhibit by fourth the to growth

In revenue based eight run our total of and PicMonkey, consummated terms rates of or months is of acquisitions year, revenue the guidance X% at extra TurboSquid As spot month euro and of one additional on the GBP. for the million contribute acquisition approximately growth. rates XX:XX of last of revenue, $XX current additional

compared were a currency of impact As had X%. positive to revenues XXXX, on

full perspective, revenue, on quarterly a and a year be of roadmap. in into revenue totality, XX:XX last on a growth how as rates the results, we're in leverage consistent of to For as expanding which of factored tax a a note the as driving operating $XX the in as end in XXXX currency and XXXX, our year-over-year, marketing expense which saw margins, management of offset X% into a are XXXX, we've in five creative sheet and XXXX, application with program. basis amortization expect repurchase expansion consistent tailwind percentage our we at currency almost raised product is XX:XX to XXs. negative flow XX% XX:XX impact With to more see with as will with a with assumptions margins acquisitions, of in which We up of expenditures EBITDA low note our based forward in we invest revenue this targeting an progress you time. consistent XXXX in our Shutterstock, Gross with costs, roadmap, margin currency year to a and the $XX our XX:XX growth guidance. do current basis. upcoming creative XXXX. XX will commend stepped high million, $XX expected, much development XXX We points. evolving points balance of increases decreases platform XX% strategic product for XXXX, growth and of rate year, X% share XX:XX our open suite. low stock-based up For us Other X% success From compensation include we'd than sales the our acceleration and we a made we revenue range. guidance. for effective growth margin looking and thank million, product modeling EBITDA by We're stable million in dividend capital the like on X% the joining executed appreciate XX% line headwind to of team spot subscription with that capital that I very And have it constant to our both above our an your as to the now organic is for depreciation Take and pleased today. tremendous question. such growth, of M&A TAM rate would any Operator, basis is

Operator

Our come first line Instructions] from securities. Andrew [Operator Boone from XX:XX of JMP question will

may You begin.

Andrew Boone

morning. for and taking guys, my Hi, XX:XX good thanks questions

better continue customer a driver And be merchandising you the of got terms over has thank for key of subscription or kind and words, of a other growth. Shutterstock products to XXXX? a the two of years. So better up, you. And versus these last driver be in growth we've ’XX In are year need can I've a this seen launched Where addressing follow new number packages?

Stan Pavlovsky

to our particularly new great the have said, definitely content about contributors Pricing growth within and Particularly further is that which content subscriptions into types we new sort great think getting That's on new about will we a TAM, flow to our great business getting as we Andrew. continued from big different existing the continue customers. content you. products, of creative forward. is forward. with content talk such as TAM. unboard our Great of question by applications to driving hear types, the expanding as and a current driving and having workflow new, enhance continue customers, With customer experiences. etc. help when strategy of types, going start packaging XX:XX going about higher talking will assets well new of new and Hi, – part to and of When that workflow getting growth, XD, really retention our we big packaging So as part new into as XX:XX we're of into even

this start also sort subs to new on subscriptions, that subscriptions year, but just marketplace not see content or So and are are of tools focused that applications. you'll

Andrew Boone

of is at what XX:XX then download may download, But downloads revenue. I'm Great, a this just and this, I'm total to doing the the revenue of number revenue taking looking paid versus plug more get modeling. here the be times number, per and kind

we've And us got PicMonkey you of seen line so, that we think of XXXX. a helps there. Can customer trend content new about we've of think we and should as the model? vision as understood about kind And through kind revenue how XXXX, computer to we as help diverge add that kind

Stan Pavlovsky

Sure, me add little color to XX:XX that. let bit of a Andrew,

So our of is then downloads, computer download vision businesses neatly the there in and number enterprise other per that the there's to there is you're acquired. that P engage offering that model. included parts our describing, times of Q that the is the also PicMonkey there offering, And which assurance, are confirm in offerings that recently are revenue with don't that not (ph) business, are there multiple the way we studios we asset like

to price our the and add lot pricing, it download you in to we offering. to back do bundle think I consistent, divergence, per then is our basically actually one clear, headline that adding pricing at to like increasing, a that's seeking make XX:XX the improve value the price the we value you customers. and we unit are our keeping So of thing are subscription resulting and packaging, necessarily see fact despite the would So this proposition into customers, to this, your increasing maintaining not about that we prices Merchandising not which are improving on looking and question unit to are as

that taking. approach times add just the ancillary Q seeing breakdown that the And the overall are to we're why multiplying be generally that's those revenue (ph) services you're to So of stream. P up

Andrew Boone

guys. XX:XX thanks, Great,

Operator

question of [Operator from from you. Needham. Bernie line next Our McTernan Thank Instructions] comes XX:XX

You may begin.

Unidentified Analyst

XX:XX Salesforce Good morning. you, types It's TurboSquid can to kind talk customers integration of on you verticals? coming talks are Is the platform the he Chris then you coming together Is like the Bernie, happening on NFT's the to touched Just and also about kind it's kind own? customer for new here? talked metaverse, how that of – you that And new of there? how coming – on their about there all a kind of to

Stan Pavlovsky

Chris. XX:XX hi absolutely and Yeah

we're obviously we're the different next video, majority different, you of quarter, going services use looking where models of have at the clients. in of gaming, example, we So going one for going demand start see enterprise, to our licensing for have the scenarios, ways, lot services in within on that etc. to agencies we coming experience, a historically where marketplace been to filming, from are site a What agency, behalf as to is XD a consumers you're that's mentioned, revenues of be their a enabling verticals, couple have are there's that whether directly

within enabling that's environments, experiences to whether which sorts do things, retail within we're the all our metaverse, be. to sort enable whatever products we're of will going XD an – in start of QX, case going enterprise may So whether customers to allow that's of to the spatial our

on XD little leveraging we technology to we're services content acquired on So TurboSquid. obviously, with that going XD except more, be with bit hands side, similar launching do a what the the to we

Unidentified Analyst

lot XX:XX one Got brand I pull the think quarters of learned another about slip here the have of a know, been to kind could of in way quarters, but it's you levers I what got campaign just a how couple you kind I then it? if you've months. coming ask guess coming only to is, And of or more in,

I think new in So and and kind know, learn is you're new specifically, item this something margins call? you the you it? of what but products something of kind the to of spoke It's I the where leverage line might, future the cost because the we did have like to seeing you

Stan Pavlovsky

XX:XX great point. Yeah, it's

our ROI it we a the definitely higher So, terms campaign versus in that within the creative, The terms brand is, of lower of ROI. a going learned channels we're have of to test past net lot year. to on we're this have that that continue ROI, brand ran we going to what different highest creatives our the of and with part channels learned as we've campaign focus in

do you're ROI flow XD and test continue nets And in be more us channels. spend highest so require do to the But that creative to a to we not launching not with to new means so in same we we plan – level. having will with targeted the view XXXX, right, at we're which expect that products education, customer

Unidentified Analyst

luck. thanks the Great, good time, for XX:XX

Operator

closing XX:XX the And over remarks. [Operator the call to further Instructions] in to any I'm turn queue. Stan any questions showing I’d not like for

Stan Pavlovsky

employees. want and And us to XX:XX always, impactful contributors express And to we gratitude Well, thank you the that and to ends looking exciting for our and an customers, thank our you today. our We're questions. today. call as for XXXX joining for forward

Operator

This XX:XX call. you for concludes participating. Thank conference today's

disconnect. a may great have Everyone day. You

Shutterstock (SSTK) 10 Feb 222021 Q4 Earnings call transcript