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Shutterstock(SSTK) - 2021 Q2 - Earnings Call Transcript
SSTKShutterstock(SSTK)2021-07-27 16:59
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Financial Data and Key Metrics Changes - Company reported a revenue growth of 19% in Q2 2021, with constant currency organic revenue growth of 12% [21][26] - Adjusted EBITDA margin expanded by 460 basis points to 27.9% due to accelerated revenue growth and improved gross margin [34] - GAAP diluted earnings per share was 0.79,whileadjusteddilutedEPSwas0.79, while adjusted diluted EPS was 1.02, representing growth of 49% and 65% respectively [34] Business Line Data and Key Metrics Changes - E-commerce revenue grew by 23%, driven by balanced growth across image, footage, and music, with TurboSquid contributing significantly [22][28] - Enterprise revenue growth accelerated to 13%, up from 5% in the previous quarter, supported by new product introductions and bookings momentum [23][28] - Subscriber count increased by 44%, and subscriber revenue grew by 25%, indicating strong demand for subscription products [40] Market Data and Key Metrics Changes - Revenue growth was 23% in North America, 24% in Europe, and 11% in the rest of the world, with European growth driven by the UK, Germany, and France [29] - The company experienced a 2% increase in paid downloads, with revenue per download rising to 4.17[40]CompanyStrategyandDevelopmentDirection−TheformationofShutterstock.AIandtheacquisitionofthreeAI−drivenplatformsrepresentastrategicpivottowardsdataandinsights,enhancingproductofferings[9][18]−Thecompanyaimstointegratepredictiveperformanceandcomputervisionsolutionsintoitsofferings,addressingcustomerpainpointsincontentselection[10][19]−Futureproductdevelopmentswillfocusonenhancingsubscriptionproductswithdata−driveninsightstoimprovecustomerretention[43][65]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementexpressedconfidenceinthecontinuationofeconomicrecoveryandraisedrevenueandEBITDAguidancefor2021[24][48]−Thecompanyanticipatesamoderationine−commercegrowthratesinthelatterhalfoftheyearduetotoughercomparables[50]−ManagementhighlightedtheimportanceofAIindrivingfuturegrowthandimprovingcustomerretention[68]OtherImportantInformation−Thecompanyplanstopayaquarterlydividendof4.17 [40] Company Strategy and Development Direction - The formation of Shutterstock.AI and the acquisition of three AI-driven platforms represent a strategic pivot towards data and insights, enhancing product offerings [9][18] - The company aims to integrate predictive performance and computer vision solutions into its offerings, addressing customer pain points in content selection [10][19] - Future product developments will focus on enhancing subscription products with data-driven insights to improve customer retention [43][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continuation of economic recovery and raised revenue and EBITDA guidance for 2021 [24][48] - The company anticipates a moderation in e-commerce growth rates in the latter half of the year due to tougher comparables [50] - Management highlighted the importance of AI in driving future growth and improving customer retention [68] Other Important Information - The company plans to pay a quarterly dividend of 0.21 per share and has initiated a 75millionannualsharebuybackprogram[37][38]−Thedeferredrevenuebalanceincreasedbyover75 million annual share buyback program [37][38] - The deferred revenue balance increased by over 8 million from the previous quarter, indicating strong future revenue potential [36] Q&A Session Summary Question: Guidance and Revenue Expectations - Analyst inquired about the guidance for Q3 and Q4, noting that the high end of the guidance implies potential revenue stagnation [58] - Management responded that they are confident in the guidance raise, but acknowledged tougher comparables in the latter half of the year [59][60] Question: Business Evolution and AI Impact - Analyst asked about the strategic pivot towards AI and how the business might evolve in the next few years [58] - Management confirmed the pivot towards a technology platform, focusing on data-enabled solutions to enhance customer decision-making [63][65] Question: AI's Impact on Growth - Analyst questioned the potential impact of AI on revenue growth in 2022 [67] - Management indicated that while specific guidance for 2022 is not provided, they expect significant benefits from AI integration over the next 12 to 18 months [69] Question: Enterprise Growth and SMB FLEX - Analyst sought clarification on the sustainability of enterprise growth and the impact of new products like SMB FLEX [70] - Management highlighted successful product introductions and a segmented sales approach as key drivers of enterprise growth [71][72] Question: Competitive Landscape and TurboSquid Integration - Analyst asked about competitive differentiation in AI and the integration of TurboSquid [75] - Management noted that while many companies leverage AI, Shutterstock's focus on creative performance and data-driven recommendations sets it apart [76][79]