Shutterstock Reports First Quarter 2014 Financial Results
"We had a very strong first quarter, with consistent growth across all regions worldwide," said Founder and CEO
Operating Metrics
Three Months Ended March 31, |
|||
2014 |
2013 |
||
(in millions, except revenue per download) |
|||
Number of paid downloads |
29.7 |
22.4 |
|
Revenue per download |
$ 2.45 |
$ 2.28 |
|
Images in our collection (end of period) |
35.4 |
25.1 |
|
Revenue
Revenue for the first quarter of 2014 was
Net Income
Net income for the first quarter of 2014 was
Non-GAAP net income for the first quarter of 2014 was
Adjusted EBITDA
Adjusted EBITDA for the first quarter of 2014 was
Cash
The Company's cash and cash equivalents and short term investments balance was
Also, during the first quarter, the Company incurred planned capital expenditures related primarily to the purchase of computer servers and networking equipment, as well as capital expenditures related to leasehold improvements, furniture and fixtures to complete the build out of its new headquarters in New York City. Total capital expenditures in the first quarter of 2014 was
The Company also made a cash payment related to the recently announced WebDAM acquisition of
Free cash flow for the first quarter of 2014 was
Financial Outlook
The Company's current financial and operating expectations for the second quarter of 2014 and updated expectations for full year 2014 are as follows:
Second Quarter 2014
- Revenue of
$76 - $78 million - Adjusted EBITDA of
$14 - $15 million - Non-cash equity-based compensation expense of approximately
$6 million - An effective tax rate of approximately 40%
- Capital expenditures of approximately
$3 million
Full Year 2014
- Revenue of
$315 - $320 million - Adjusted EBITDA of $66 -
$68 million ; this expectation represents an increase of$1 million as compared to the company's prior expectations of$68 - $70 million , offset by investment in WebDAM operations that will reduce EBITDA by$3 million - Non-cash equity-based compensation expense of approximately
$22 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 first 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
3/31/12 |
6/30/12 |
9/30/12 |
12/31/12 |
3/31/13 |
6/30/13 |
9/30/13 |
12/31/13 |
3/31/14 |
|
(in millions, except revenue per download) |
|||||||||
Number of paid downloads |
17.6 |
18.3 |
18.7 |
21.4 |
22.4 |
24.3 |
25.4 |
28.0 |
29.7 |
Revenue per download |
$ 2.13 |
$ 2.22 |
$ 2.26 |
$ 2.30 |
$ 2.28 |
$ 2.33 |
$ 2.35 |
$ 2.43 |
$ 2.45 |
Images in collection (end of period) |
18.8 |
20.2 |
21.7 |
23.3 |
25.1 |
27.3 |
29.7 |
32.2 |
35.4 |
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 March 31, |
|||
2014 |
2013 |
||
Cost of revenue |
$ 249 |
$ 55 |
|
Sales and marketing |
902 |
203 |
|
Product development |
949 |
255 |
|
General and administrative |
1,037 |
503 |
|
Total |
$ 3,137 |
$ 1,016 |
|
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 March 31, |
|||
2014 |
2013 |
||
Cost of revenue |
$ 8 |
$ 8 |
|
General and administrative |
39 |
48 |
|
Total |
$ 47 |
$ 56 |
|
Included in the accompanying financial results are expenses related to depreciation of property and equipment, as follows (in thousands):
Three Months Ended March 31, |
|||
2014 |
2013 |
||
Cost of revenue |
$ 897 |
$ 410 |
|
General and administrative |
607 |
313 |
|
Total |
$ 1,504 |
$ 723 |
|
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; failure to protect the confidential information of the Company's customers and the Company's networks against security breaches; 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 Per Share Data) |
||||||||
(Unaudited) |
||||||||
March 31, 2014 |
December 31, 2013 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ 157,978 |
$ 155,355 |
||||||
Short-term investments |
54,994 |
54,429 |
||||||
Credit card receivables |
3,012 |
2,083 |
||||||
Accounts receivable, net |
8,143 |
6,081 |
||||||
Prepaid expenses and other current assets |
22,472 |
19,809 |
||||||
Deferred tax assets, net |
3,948 |
5,431 |
||||||
Total current assets |
250,547 |
243,188 |
||||||
Property and equipment, net |
25,798 |
20,256 |
||||||
Intangibles assets, net |
4,717 |
853 |
||||||
Goodwill |
10,186 |
1,423 |
||||||
Deferred tax assets, net |
13,417 |
10,720 |
||||||
Other assets |
2,095 |
2,048 |
||||||
Total assets |
$ 306,760 |
$ 278,488 |
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ 5,446 |
$ 4,164 |
||||||
Accrued expenses |
18,999 |
23,638 |
||||||
Contributor royalties payable |
10,942 |
9,180 |
||||||
Deferred revenue |
60,855 |
52,100 |
||||||
Other liabilities |
1,845 |
2,846 |
||||||
Total current liabilities |
98,087 |
91,928 |
||||||
Other non-current liabilities |
9,552 |
3,961 |
||||||
Total liabilities |
107,639 |
95,889 |
||||||
Commitment and contingencies |
||||||||
Stockholders' equity: |
||||||||
Common stock, $0.01 par value; 200,000 shares authorized; 35,196 and 35,071 shares outstanding as of March 31, 2014 and December 31, 2013, respectively |
352 |
351 |
||||||
Additional paid-in capital |
139,035 |
127,443 |
||||||
Accumulated comprehensive income |
20 |
9 |
||||||
Retained earnings |
59,714 |
54,796 |
||||||
Total stockholders' equity |
199,121 |
182,599 |
||||||
Total liabilities and stockholders' equity |
$ 306,760 |
$ 278,488 |
Shutterstock, Inc. |
||||||||
Consolidated Statements of Operations |
||||||||
(In Thousands, Except Per Share Data) |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2014 |
2013 |
|||||||
Revenue |
$ 72,777 |
$ 51,117 |
||||||
Operating expenses: |
||||||||
Cost of revenue |
29,108 |
19,821 |
||||||
Sales and marketing |
19,276 |
11,978 |
||||||
Product development |
7,777 |
4,555 |
||||||
General and administrative |
7,517 |
4,780 |
||||||
Total operating expenses |
63,678 |
41,134 |
||||||
Income from operations |
9,099 |
9,983 |
||||||
Other income (expense), net |
21 |
(12) |
||||||
Income before income taxes |
9,120 |
9,971 |
||||||
Provision for income taxes |
4,202 |
4,406 |
||||||
Net income |
$ 4,918 |
$ 5,565 |
||||||
Less: |
||||||||
Preferred interest distributed |
- |
- |
||||||
Undistributed earnings to participating stockholder/members |
11 |
19 |
||||||
Net income available to common stockholders/members |
$ 4,907 |
$ 5,546 |
||||||
Net income per basic share available to common stockholders/members: |
||||||||
Distributed |
$ - |
$ - |
||||||
Undistributed |
0.14 |
0.17 |
||||||
Basic |
$ 0.14 |
$ 0.17 |
||||||
Net income per diluted share available to common stockholders/members: |
||||||||
Distributed |
$ - |
$ - |
||||||
Undistributed |
0.14 |
0.16 |
||||||
Diluted |
$ 0.14 |
$ 0.16 |
||||||
Weighted average shares outstanding: |
||||||||
Basic |
35,027,480 |
33,398,797 |
||||||
Diluted |
35,838,853 |
33,851,843 |
||||||
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 |
||||||||
March 31, |
||||||||
2014 |
2013 |
|||||||
Net income |
$ 4,918 |
$ 5,565 |
||||||
Add/(less): |
||||||||
(a) |
Depreciation and amortization |
1,551 |
779 |
|||||
(b) |
Write-off of property and equipment |
367 |
- |
|||||
(c) |
Non-cash equity based compensation |
3,137 |
1,016 |
|||||
(d) |
Interest (income) expense, net |
(21) |
12 |
|||||
(e) |
Provision for income taxes |
4,202 |
4,406 |
|||||
Adjusted EBITDA (1) |
$ 14,154 |
$ 11,778 |
||||||
Adjusted EBITDA per diluted common share |
$ 0.39 |
$ 0.35 |
||||||
Weighted average diluted shares |
35,838,853 |
33,851,843 |
||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2014 |
2013 |
|||||||
Net income |
$ 4,918 |
$ 5,565 |
||||||
(a) |
Non-cash equity based compensation |
3,137 |
1,016 |
|||||
(b) |
Non-cash equity based compensation tax benefit |
(929) |
(449) |
|||||
Non-GAAP net income |
$ 7,126 |
$ 6,132 |
||||||
Non-GAAP net income per diluted common share |
$ 0.20 |
$ 0.18 |
||||||
Weighted average diluted shares |
35,838,853 |
33,851,843 |
||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2014 |
2013 |
|||||||
Net cash provided by operating activities |
$ 15,629 |
$ 13,790 |
||||||
Interest income (expense), net |
21 |
(12) |
||||||
Capital expenditures |
(10,881) |
(1,127) |
||||||
Free cash flow |
$ 4,727 |
$ 12,675 |
||||||
Adjusted EBITDA |
$ 14,154 |
$ 11,778 |
||||||
Add/(less): |
||||||||
(a) |
Changes in operating assets and liabilities |
12,296 |
7,893 |
|||||
(b) |
Provision for income taxes |
(4,202) |
(4,406) |
|||||
(c) |
Deferred income taxes |
(402) |
(1,692) |
|||||
(d) |
Excess tax benefit from exercise of stock options |
(6,345) |
- |
|||||
(e) |
Provision for doubtful accounts/chargeback/sales refund reserves |
107 |
104 |
|||||
(f) |
Interest income (expense), net |
21 |
(12) |
|||||
(g) |
Amortization of financing fees |
- |
125 |
|||||
Net cash provided by operating activities |
$ 15,629 |
$ 13,790 |
||||||
(1) Earnings/(loss) before interest income/(expense), income taxes, depreciation, amortization, disposals, non-cash equity |
||||||||
based compensation and other non-cash charges. |
Logo - http://photos.prnewswire.com/prnh/20120514/NY06418LOGO
SOURCE
Meagan Kirkpatrick, Shutterstock, Inc., mkirkpatrick@shutterstock.com, 646-402-2854; Denise Garcia, ICR, denise.garcia@icrinc.com