sstk-20220331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________________________________________________

FORM 10-Q

___________________________________________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35669

_____________________________________________________________________

SHUTTERSTOCK, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________


Delaware						80-0812659
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

350 Fifth Avenue, 21st Floor

New York, NY 10118

(Address of principal executive offices, including zip code)

(646) 710-3417

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

______________________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SSTK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of April 22, 2022, 36,237,291 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

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Shutterstock, Inc.

FORM 10-Q

Table of Contents

For the Quarterly Period Ended March 31, 2022


		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Stockholders’ Equity	7
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35

Item 6.	Exhibits	35

Signatures		37

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, particularly in the discussion under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than statements of historical fact, are forward-looking. Examples of forward-looking statements include, but are not limited to, statements regarding guidance, industry prospects, future business, future results of operations or financial condition, future dividends, future stock performance, our ability to consummate acquisitions and integrate the businesses we have acquired or may acquire into our existing operations, new or planned features, products or services, management strategies and our competitive position. You can identify many forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expects,” “aims,” “anticipates,” “believes,” “estimates,” “intends,” “plans,” “predicts,” “projects,” “seeks,” “potential,” “opportunities” and other similar expressions and the negatives of such expressions. However, not all forward-looking statements contain these words. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, those discussed under the caption “Risk Factors” in our most recently filed Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the “SEC”) on February 10, 2022 (our “2021 Form 10-K”), and in our consolidated financial statements, related notes, and the other information appearing elsewhere in the 2021 Form 10-K, this Quarterly Report on Form 10-Q and our other filings with the SEC. Given these risks and uncertainties, you should not place undue reliance on any forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date hereof, and we do not intend, and, except as required by law, we undertake no obligation to update any forward-looking statements contained herein after the date of this report to reflect actual results or future events or circumstances.

Unless the context otherwise indicates, references in this Quarterly Report on Form 10-Q to the terms “Shutterstock,” “the Company,” “we,” “our” and “us” refer to Shutterstock, Inc. and its subsidiaries. “Shutterstock,” “Shutterstock Editorial,” “Asset Assurance,” “Offset,” “Bigstock,” “Rex Features,” “PremiumBeat,” “TurboSquid,” “PicMonkey,” “Pattern89,” “Shotzr,” “Shutterstock Studios” and “Shutterstock Editor” and their logos are registered trademarks and are the property of Shutterstock, Inc. or one of our subsidiaries. All other trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Shutterstock, Inc.

Consolidated Balance Sheets

(In thousands, except par value amount)

(unaudited)


	March 31,		December 31,
	2022		2021

ASSETS
Current assets:
Cash and cash equivalents	$	258,112	$	314,017


Accounts receivable, net of allowance of $2,125 and $1,910	44,774		47,707
Prepaid expenses and other current assets	36,833		26,491


Total current assets	339,719		388,215
Property and equipment, net	50,206		48,074
Right-of-use assets	32,935		34,570
Intangible assets, net	116,859		123,822
Goodwill	219,176		219,816
Deferred tax assets, net	11,559		10,512
Other assets	25,524		26,701
Total assets	$	795,978	$	851,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,208	$	10,092
Accrued expenses	74,131		99,529
Contributor royalties payable	29,816		29,004

Deferred revenue	178,734		180,979

Other current liabilities	13,997		14,180
Total current liabilities	303,886		333,784
Deferred tax liability, net	2,517		2,781
Lease liabilities	35,857		36,966
Other non-current liabilities	9,295		9,697
Total liabilities	351,555		383,228
Commitments and contingencies (Note 13)

Stockholders’ equity:

Common stock, $0.01 par value; 200,000 shares authorized; 39,352 and 39,209 shares issued and 36,138 and 36,417 shares outstanding as of March 31, 2022 and December 31, 2021, respectively	394		392
Treasury stock, at cost; 3,214 and 2,792 shares as of March 31, 2022 and December 31, 2021, respectively	(165,465)		(127,196)
Additional paid-in capital	373,765		376,537
Accumulated comprehensive loss	(11,674)		(10,788)
Retained earnings	247,403		229,537
Total stockholders’ equity	444,423		468,482
Total liabilities and stockholders’ equity	$	795,978	$	851,710

See Notes to Unaudited Consolidated Financial Statements.

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Shutterstock, Inc.

Consolidated Statements of Operations

(In thousands, except for per share data)

(unaudited)


	Three Months Ended March 31,
	2022		2021

Revenue	$	199,132	$	183,281

Operating expenses:
Cost of revenue	69,451		61,832
Sales and marketing	53,329		41,921
Product development	13,626		10,731
General and administrative	30,808		30,679
Total operating expenses	167,214		145,163
Income from operations	31,918		38,118

Other income / (expense), net	758		(2,462)
Income before income taxes	32,676		35,656
Provision for income taxes	6,104		6,142
Net income	$	26,572	$	29,514





Earnings per share:
Basic	$	0.73	$	0.81
Diluted	$	0.71	$	0.79

Weighted average common shares outstanding:
Basic	36,303		36,336
Diluted	37,204		37,249

See Notes to Unaudited Consolidated Financial Statements.

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Shutterstock, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(unaudited)


	Three Months Ended March 31,
	2022		2021

Net income	$	26,572	$	29,514
Foreign currency translation (loss) / gain	(886)		226

Other comprehensive (loss) / income	(886)		226
Comprehensive income	$	25,686	$	29,740

See Notes to Unaudited Consolidated Financial Statements.

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Shutterstock, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(unaudited)


											Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Retained Earnings
	Common Stock					Treasury Stock
Three Months Ended March 31, 2022	Shares		Amount			Shares		Amount									Total
Balance at December 31, 2021		39,209		$	392		2,792		$	(127,196)	$	376,537	$	(10,788)	$	229,537		$	468,482




Equity-based compensation		—		—			—		—		7,826		—		—			7,826



Issuance of common stock in connection with employee stock option exercises and RSU vesting		261		3			—		—		(3)		—		—			—
Common shares withheld for settlement of taxes in connection with equity-based compensation		(118)		(1)			—		—		(10,595)		—		—			(10,596)



Repurchase of treasury shares		—		—			422		(38,269)		—		—		—			(38,269)
Cash dividends paid		—		—			—		—		—		—		(8,706)			(8,706)
Other comprehensive loss		—		—			—		—		—		(886)		—			(886)
Net income		—		—			—		—		—		—		26,572			26,572
Balance at March 31, 2022		39,352		$	394		3,214		$	(165,465)	$	373,765	$	(11,674)	$	247,403		$	444,423

Three Months Ended March 31, 2021
Balance at December 31, 2020		38,803		$	389		2,558		$	(100,027)	$	360,939	$	(7,681)	$	168,305		$	421,925




Equity-based compensation		—		—			—		—		8,210		—		—			8,210



Issuance of common stock in connection with employee stock option exercises and RSU vesting		357		4			—		—		1,305		—		—			1,309
Common shares withheld for settlement of taxes in connection with equity-based compensation		(150)		(2)			—		—		(13,032)		—		—			(13,034)




Cash dividends paid		—		—			—		—		—		—

SEC Form 10-Q filed by Shutterstock Inc.