Shutterstock (SSTK) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 5.4% year-over-year to $220.1 million, driven by strong Data, Distribution, and Services (DDS) growth, offsetting a 9% decline in Content revenue.

• Adjusted EBITDA was $62.1 million (28.2% margin), exceeding expectations; net income was $3.6 million, down from $50.0 million last year due to a prior one-time gain.

• Envato acquisition completed in July 2024 for $250 million, expected to enhance content growth and subscription offerings; Backgrid acquired in February 2024.

• Strategic focus on Gen AI innovation, expanding unlimited subscriptions, and scaling DDS.

Financial highlights

• Q2 2024 revenue: $220.1 million (+5.4% year-over-year); Content: $170.0 million (-9%); DDS: $50.1 million (+129%).

• Adjusted EBITDA: $62.1 million (28.2% margin); adjusted net income: $35.9 million; net income: $3.6 million.

• Free cash flow conversion: 36%; adjusted free cash flow: $36.2 million.

• Cash and cash equivalents at quarter-end: $74.9 million.

• Revenue per download: $5.09; paid downloads: 33.4 million.

Outlook and guidance

• 2024 revenue guidance raised to $927–$936 million (6–7% growth); DDS expected up 27%, content down 8% (excluding Envato).

• Envato to contribute $75 million to 2024 revenue, reported in content from Q3; full-year content revenue up 2.5% including Envato.

• Adjusted net income per diluted share guidance: $4.18–$4.32; adjusted EBITDA: $245–$248 million.

• Management expects cost of revenue and sales and marketing expenses to fluctuate with revenue and investments.

• Company expects cash and operations to meet needs for at least 12 months.