Shutterstock(SSTK)2022-04-26 16:33Financial Data and Key Metrics Changes - Shutterstock reported a revenue growth of 9% year-over-year, or 11% on a constant currency basis, for Q1 2022 [7][23] - Subscription revenue reached a record 43% of total revenue, up from previous quarters, with overall subscriber count increasing by 17% [11][31] - Gross margin declined by approximately 114 basis points to 65.1% year-over-year, largely due to higher non-cash M&A amortization expenses [24] - Adjusted EBITDA margins were 27.5%, down by 300 basis points from the previous year, mainly driven by increased marketing spend [27] Business Line Data and Key Metrics Changes - The enterprise channel grew by 11% year-over-year, reflecting strong performance in FLEX team products and Shutterstock Studios [7][24] - E-commerce revenue grew by 7% year-over-year, or 9% on a constant currency basis, aligning with expectations [10][23] - The FLEX team subscription and FLEX Premium products are now key offerings for small and medium businesses, contributing to overall growth [8] Market Data and Key Metrics Changes - The company experienced a 2% foreign exchange headwind to revenues, primarily due to the depreciation of the euro and GBP [39][52] - Approximately 1% of revenues were derived from Russia and Ukraine, which the company has factored into its expectations for the year [20][39] Company Strategy and Development Direction - Shutterstock is focusing on integrating new applications and enhancing its product offerings, including AI-powered search and creative tools [13][18] - The company plans to introduce a creative flow subscription targeting casual creatives, which will include various applications and a free tier of content [17] - The strategy aims to position Shutterstock as a full-service partner for enterprise customers, enhancing customer retention and engagement [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth prospects despite headwinds from foreign exchange and geopolitical issues [32][39] - The company is maintaining its full-year revenue growth guidance of 8% to 10%, with expectations for margin stability [32][33] - Management highlighted the importance of product differentiation and sustained growth through new applications and strategic solutions [21][33] Other Important Information - Shutterstock made a 38.4 million during the quarter, reducing total shares outstanding [28] Q&A Session Summary Question: FX impact on revenue and integration of PicMonkey - Management quantified the FX impact at approximately $1 million for the quarter and discussed ongoing integration plans for PicMonkey [39][40] Question: User education on new applications - Management outlined plans for user education through site marketing and content creation to drive discovery of new applications [46][47] Question: Guidance and revenue growth offsets - Management indicated strong performance in the enterprise channel and confidence in product roadmap as offsets to revenue headwinds [51] Question: Competition in the stock content market - Management acknowledged the competitive landscape but emphasized Shutterstock's unique data and content library advantages [54] Question: Inclusion of PicMonkey subscribers in metrics - Management confirmed that PicMonkey subscribers have not yet been included in subscriber counts, awaiting annualization of the acquisition [58]