Shutterstock (SSTK) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $251 million, up 7.4% year-over-year, and record adjusted EBITDA of $70 million with a 27.9% margin, driven by the Envato acquisition.

• Envato acquisition contributed $38 million in content revenue, expanded offerings, and drove strong subscriber growth, outperforming expectations.

• Net income for Q3 2024 was $17.6 million, down from $28.4 million in Q3 2023 due to higher costs and interest expense.

• Raised full-year 2024 guidance for revenue and adjusted EBITDA.

• Announced CFO transition: Jarrod Yahes departing, Rick Powell (Rik Powell) promoted to CFO.

Financial highlights

• Content revenue grew 14% year-over-year to $204 million; excluding Envato, content declined 7% but showed sequential improvement.

• Data, Distribution, and Services revenue declined 14% year-over-year to $46.9 million, but grew over 40% year-to-date.

• Adjusted net income for Q3 2024 was $46.4 million; adjusted free cash flow was $45.7 million; cash balance at quarter-end was $131.4 million.

• Net debt at quarter-end was $149 million, with a net debt-to-LTM EBITDA ratio of 0.6x.

• Cost of revenue increased to 42% in Q3 2024, mainly due to Envato-related costs; interest expense rose to $4.5 million.

Outlook and guidance

• Raised full-year 2024 revenue guidance to $935–$940 million (7–7.5% growth year-over-year).

• Adjusted EBITDA guidance increased to $247–$250 million, including $9 million in M&A costs.

• Adjusted net income per diluted share guidance raised to $4.22–$4.31.

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

• Targeting $1.2 billion in revenue and $350 million in EBITDA by 2027.