25 Feb 2016 Highlights from Shutterstock’s Q4 and Full Year 2015 Report

2015 was a huge year for Shutterstock, the biggest in its history like all those before it, but also with more challenges than ever before.

Yesterday, Shutterstock released their financial report for the fourth quarter and full year 2015.

While the last quarter’s revenues grew 1% less than Q3, they still met the desired 30% growth rate for the full year. A significant contributor to growth was their Enterprise division, which for the first time they’ve broken out and said it accounts for 25% of their total revenue for the quarter, includes over 24,000 customers and experienced 70% growth in the quantity of customers spending over $100,000 per year.

In the earnings call the company communicated their plans to migrate their technology platform to a full services structure, which they expect to have material impact on expenses in 2016, but not exceed $10 million.

Special mentions were given to their new reverse image search “reducing dependence on keywords”, and their Canva-esque Photo Editor which they report makes a customer “twice as likely to download an image”.

Q4

For the last quarter of 2015, the company’s revenue totalled $116M, a 27% increase compared to the same period in 2014.

Paid downloads grew 19%, mainly from new customers, and revenue per downloads grew 7% from more on-demand and enterprise sales. Music and editorial businesses brought in 3% of the total revenues for the quarter.

The quarter’s adjusted EBITDA increased 14% relative to Q4 2014 as the growth in paid downloads raised royalty expenses. Higher personnel and marketing expenses, and operating costs from the businesses acquired that year also added to this metric.

Full Year 2015

Shutterstock’s total revenues for 2015 were of $425.1M, reaching the all-important 30% growth compared to 2014. 17% of that total growth was due to an increase in paid downloads. Another 10% comes from higher revenues per download –again in on-demand and enterprise– and the final 3% were delivered by the businesses acquired earlier that year –Premium Beat and Rex Features.

Due to higher royalty payouts, hires and acquisitions, adjusted EBITDA for the year was of 19% more than in 2014.

Highlights

In the Earnings Call yesterday morning, the company shared that their current sales rate is at 4.6 downloads per second.

Their customer base has reached 1.5 million customers, with 24,000 of them using the enterprise service.

Video and music divisions combined brought in 10% of revenue. On-demand is outgrowing subscription sales, but both streams are increasing.

The company says a strong 39% of their business is in North America, followed by Europe with 34%. The remaining percentage for the rest of the world shows Korea –and Asia in general–, Germany and the UK as stronger growth regions. Despite the European market getting a bit “choppy”, they say there’s no causes for concern, but rather mindful opportunities.

Asked about Adobe’s presence and whether that competitor was a concern, CEO Jon Oringer answered with a simple “no”.

So it looks like business remains very positive for Shutterstock with their diversification efforts starting to pay off.  Especially enterprise, which with the newly disclosed figures is proving to be a very significant part of Shutterstock’s success.