Shutterstock Reports Second Quarter 2014 Financial Results
"Our second quarter results showed continued consistent growth and expansion in key metrics," said Founder and CEO
Operating Metrics |
|||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
(in millions, except revenue per download) |
(in millions, except revenue per download) |
||||||
Number of paid downloads |
31.5 |
24.3 |
61.2 |
46.7 |
|||
Revenue per download (1) |
$ 2.52 |
$ 2.33 |
$ 2.49 |
$ 2.31 |
|||
Images in our collection (end of period) |
38.8 |
27.3 |
38.8 |
27.3 |
|||
(1) Revenue per download metric excludes the impact of revenue not associated with content downloads. |
Revenue
Revenue for the second quarter of 2014 was
Net Income
Net income for the second quarter of 2014 was
Non-GAAP net income for the second quarter of 2014 was
Adjusted EBITDA
Adjusted EBITDA for the second quarter of 2014 was
Cash
The Company's cash and cash equivalents and short term investments balance was
Also, during the second quarter, the Company incurred planned capital expenditures related primarily to the purchase of computer servers and networking equipment in the amount of
Free cash flow for the second quarter of 2014 was
Financial Outlook
The Company's current financial and operating expectations for the third quarter of 2014 and increased expectations for full year 2014 are as follows:
Third Quarter 2014
- Revenue of
$81 - $83 million - Adjusted EBITDA of
$15.5 - $16.5 million - Non-cash equity-based compensation expense of approximately
$7.0 million - An effective tax rate of approximately 40%
- Capital expenditures of approximately
$4 million
Full Year 2014
- Revenue of
$323 - $327 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 , including the approximately$7.6 million of capital expenditures related to the buildout of the Company's new headquarters
Earnings Teleconference Information
The Company will discuss its second quarter 2014 financial results during a teleconference today,
Following completion of the call, a recorded replay of the webcast will be available on
Additional investor information can be accessed at http://investor.shutterstock.com.
Non-GAAP Financial Measures
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 |
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6/30/12 |
9/30/12 |
12/31/12 |
3/31/13 |
6/30/13 |
9/30/13 |
12/31/13 |
3/31/14 |
6/30/14 |
|
(in millions, except revenue per download) |
|||||||||
Number of paid downloads |
18.3 |
18.7 |
21.4 |
22.4 |
24.3 |
25.4 |
28.0 |
29.7 |
31.5 |
Revenue per download(1) |
$ 2.22 |
$ 2.26 |
$ 2.30 |
$ 2.28 |
$ 2.33 |
$ 2.35 |
$ 2.43 |
$ 2.45 |
$ 2.52 |
Images in collection (end of period) |
20.2 |
21.7 |
23.3 |
25.1 |
27.3 |
29.7 |
32.2 |
35.4 |
38.8 |
(1) Revenue per download metric excludes the impact of revenue not associated with content downloads. |
Non-Cash Equity-Based Compensation
Included in the accompanying financial results are expenses related to non-cash equity-based compensation, as follows (in thousands):
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
Cost of revenue |
$ 368 |
$ 110 |
$ 617 |
$ 165 |
|||
Sales and marketing |
968 |
304 |
1,870 |
507 |
|||
Product development |
1,775 |
329 |
2,724 |
584 |
|||
General and administrative |
3,145 |
811 |
4,182 |
1,314 |
|||
Total |
$ 6,256 |
$ 1,554 |
$ 9,393 |
$ 2,570 |
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):
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
Cost of revenue |
$ 29 |
$ 7 |
$ 41 |
$ 15 |
|||
General and administrative |
138 |
48 |
177 |
97 |
|||
Total |
$ 167 |
$ 55 |
$ 218 |
$ 112 |
Included in the accompanying financial results are expenses related to the depreciation of property and equipment, as follows (in thousands):
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
Cost of revenue |
$ 1,106 |
$ 542 |
$ 2,003 |
$ 952 |
|||
General and administrative |
808 |
347 |
1,411 |
661 |
|||
Total |
$ 1,914 |
$ 889 |
$ 3,414 |
$ 1,613 |
About
Headquartered in
For more information, please visit http://www.shutterstock.com, and follow
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
Shutterstock, Inc. Consolidated Balance Sheets (In thousands, except par value amount) (unaudited) June 30, 2014 December 31, 2013 ASSETS Current assets: Cash and cash equivalents $ 180,851 $ 155,355 Short-term investments 54,997 54,429 Credit card receivables 2,898 2,083 Accounts receivable, net 11,119 6,081 Prepaid expenses and other current assets 19,819 19,809 Deferred tax assets, net 4,340 5,431 Total current assets 274,024 243,188 Property and equipment, net 27,575 20,256 Intangibles assets, net 4,546 853 Goodwill 10,186 1,423 Deferred tax assets, net 15,097 10,720 Other assets 1,891 2,048 Total assets $ 333,319 $ 278,488 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,483 $ 4,164 Accrued expenses 22,473 23,638 Contributor royalties payable 10,845 9,180 Deferred revenue 66,437 52,100 Other liabilities 822 2,846 Total current liabilities 106,060 91,928 Other non-current liabilities 11,794 3,961 Total liabilities 117,854 95,889 Commitment and contingencies Stockholders' equity: Common stock, $0.01 par value; 200,000 shares authorized; 353 351 Additional paid-in capital 150,495 127,443 Accumulated comprehensive income 44 9 Retained earnings 64,573 54,796 Total stockholders' equity 215,465 182,599 Total liabilities and stockholders' equity $ 333,319 $ 278,488
35,334 and 35,071 shares outstanding as of June 30, 2014 and
December 31, 2013, respectively
Shutterstock, Inc. Consolidated Statements of Operations (In thousands, except for share and per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013 Revenue $ 80,238 $ 56,809 $ 153,016 $ 107,926 Operating expenses: Cost of revenue 32,047 21,768 61,159 41,589 Sales and marketing 20,492 13,314 39,768 25,292 Product development 9,275 5,060 17,052 9,615 General and administrative 9,994 5,734 17,508 10,514 Total operating expenses 71,808 45,876 135,487 87,010 Income from operations 8,430 10,933 17,529 20,916 Other (expense) income, net (19) 20 2 8 Income before income taxes 8,411 10,953 17,531 20,924 Provision for income taxes 3,550 4,090 7,753 8,496 Net income $ 4,861 $ 6,863 $ 9,778 $ 12,428 Less: Preferred interest distributed - - - - Undistributed earnings to participating stockholder 10 22 21 41 Net income available to common stockholders $ 4,851 $ 6,841 $ 9,757 $ 12,387 Net income per basic share available to common stockholders: Undistributed $ 0.14 $ 0.20 $ 0.28 $ 0.37 Basic $ 0.14 $ 0.20 $ 0.28 $ 0.37 Net income per diluted share available to common stockholders: Undistributed $ 0.14 $ 0.20 $ 0.27 $ 0.37 Diluted $ 0.14 $ 0.20 $ 0.27 $ 0.37 Weighted average shares outstanding: Basic 35,148,876 33,471,679 35,089,254 33,435,439 Diluted 35,874,789 34,040,934 35,857,899 33,903,898
Shutterstock, Inc. Reconciliation of Non-GAAP Financial Information to GAAP (In thousands, except for share and per share information) (Unaudited) Unaudited Supplemental Data The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. 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 results with our results from other reporting periods and with the results of other companies. Three Months Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013 Net income $ 4,861 $ 6,863 $ 9,778 $ 12,428 Add/(less): (a) Depreciation and amortization 2,081 944 3,632 1,725 (b) Write-off of property and equipment - - 367 - (c) Non-cash equity based compensation 6,256 1,554 9,393 2,570 (d) Other expense (income), net 19 (20) (2) (8) (e) Provision for income taxes 3,550 4,090 7,753 8,496 Adjusted EBITDA (1) $ 16,767 $ 13,431 $ 30,921 $ 25,211 Adjusted EBITDA per diluted common share $ 0.47 $ 0.39 $ 0.86 $ 0.74 Weighted average diluted shares 35,874,789 34,040,934 35,857,899 33,903,898 Three Months Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013 Net income $ 4,861 $ 6,863 $ 9,778 $ 12,428 (a) Non-cash equity based compensation 6,256 1,554 9,393 2,570 (b) Non-cash equity based compensation tax benefit (2,161) (580) (3,148) (1,044) Non-GAAP net income $ 8,956 $ 7,837 $ 16,023 $ 13,954 Non-GAAP net income per diluted common share $ 0.25 $ 0.23 $ 0.45 $ 0.41 Weighted average diluted shares 35,874,789 34,040,934 35,857,899 33,903,898 Three Months Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013 Net cash provided by operating activities $ 21,158 $ 4,024 $ 36,787 $ 17,814 Other (expense) income, net (19) 20 2 8 Capital expenditures (3,899) (1,859) (14,780) (2,986) Free cash flow $ 17,278 $ 2,145 $ 22,005 $ 14,820 Adjusted EBITDA $ 16,767 $ 13,431 $ 30,921 $ 25,211 Add/(less): (a) Changes in operating assets and liabilities 12,181 (3,053) 24,478 4,838 (b) Provision for income taxes (3,550) (4,090) (7,753) (8,496) (c) Deferred income taxes (2,072) (1,435) (2,474) (3,127) (d) Excess tax benefit from exercise of stock options (2,376) (1,009) (8,721) (1,009) (e) Provision for doubtful accounts/chargeback/sales refund reserves 187 160 294 264 (f) Other (expense) income, net (19) 20 2 8 (g) Amortization of financing fees - - - 125 (h) Change in fair value of contingent consideration 40 - 40 - Net cash provided by operating activities $ 21,158 $ 4,024 $ 36,787 $ 17,814 (1) Earnings/(loss) before interest income/(expense), income taxes, depreciation, amortization, disposals, non-cash equity based compensation and other non-cash charges.
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SOURCE
Meagan Kirkpatrick, Shutterstock, Inc., +1-646-402-2854, kirkpatrick@shutterstock.com; Denise Garcia, ICR, denise.garcia@icrinc.com