Stock photography and footage provider Shutterstock (NYSE:SSTK) reported Q1 CY2024 results beating Wall Street analysts' expectations, with revenue flat year on year at $214.3 million. The company's full-year revenue guidance of $929.5 million at the midpoint also came in 6.5% above analysts' estimates. It made a non-GAAP profit of $1.13 per share, down from its profit of $1.29 per share in the same quarter last year.
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Shutterstock (SSTK) Q1 CY2024 Highlights:
- Revenue: $214.3 million vs analyst estimates of $208.5 million (2.8% beat)
- EPS (non-GAAP): $1.13 vs analyst estimates of $0.99 (13.8% beat)
- The company lifted its revenue guidance for the full year from $875 million to $929.5 million at the midpoint, a 6.2% increase
- Gross Margin (GAAP): 58.8%, down from 63.7% in the same quarter last year
- Free Cash Flow was -$6.16 million, down from $22.65 million in the previous quarter
- Subscribers: 499,000, down 60,000 year on year
- Market Capitalization: $1.51 billion
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE:SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Online MarketplaceMarketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.
Sales GrowthShutterstock's revenue growth over the last three years has been unremarkable, averaging 8.5% annually. This quarter, Shutterstock beat analysts' estimates but reported a year on year revenue decline of 0.4%.
Ahead of the earnings results, analysts were projecting sales to grow 0.8% over the next 12 months.
Usage Growth As an online marketplace, Shutterstock generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, Shutterstock's users, a key performance metric for the company, grew 30.3% annually to 499,000. This is among the fastest growth rates of any consumer internet company, indicating that users are excited about its offerings.
Unfortunately, Shutterstock's users decreased by 60,000 in Q1, a 10.7% drop since last year.
Key Takeaways from Shutterstock's Q1 Results
We were glad Shutterstock's revenue topped Wall Street's estimates as its revenue per downloaded image slightly outperformed. Despite the beat, we note its revenue growth was quite weak. Its number of users also declined, missing analysts' projections. On the bright side, its full-year revenue, EBITDA, and EPS guidance blew past expectations.
On April 22, the Board declared a dividend of $0.30 per share, payable on June 13, 2024 to stockholders as of May 30, 2024. The company also announced it would acquire Envato for $245 million today, a provider of digital creative assets and templates.
Overall, this quarter's results could have been better but its outlook was great. The stock is flat after reporting and currently trades at $42.44 per share.
