Shutterstock Has 41% Growth In 2012

Posted on 2/22/2013 by Jim Pickerell | Printable Version | Comments (0)

In its quarterly conference call Shutterstock reported revenue of $169.2 million for the full year of 2012, a 41% increase over the $120.3 million in 2011. Fourth quarter revenue was $49.2 million, a 42% increase over Q4 2011.

Looking ahead, the company expects to see revenue of between $48.5 and $50.5 million in Q1 2013, and for the full year revenue in the range of $213 to $219 million. Shutterstock stock (SSTK) closed at $32.88, up 17.22% on Friday.

Operating Expenses For The Year

  Thousands Percent of Gross
Cost of Revenue $64,676 38%
Sales and Marketing $45,107 26.6%
Product Development $16,330  
General and Administrative $21,651  
Net Operating Expenses $147,764 87%


The cost of revenue was 38% of total revenue and is driven primarily by contributor royalty payments. However, in October Oringer said that the company pays out about 30% of revenue ( to image creators. Thus, costs other than royalties may be included in the $64.6 million figure.

If all the $64.676 million was paid out in royalties that would mean that the average payout per download would be $0.85. If only 30% of revenue is paid out in royalties that would work out to a cost of revenue of about $50.76 million. In that case the average per download, and this includes the higher fees from “Pay As You Go” and “Extended Licenses,” would be about $0.67 per download.  Since the base fee for subscription sales is $0.38 per download creators who have a high percentage of “Pay As You Go” and “Extended Licenses” might earn significantly more that $0.67 per download.

Based on reports we have from image creators we think there was probably something in the range of $14 million that was paid out for other unspecified “costs of revenue” making the true amount paid out in royalties about $50 million.
    (Later clarification: Cost of sales includes royalties, credit card processing fees, depreciation related to server capex, data center hosting costs, customer support costs, etc. Thus, while "royalties" makes up the majority of the $64.676 million the royalties paid out was probably somewhere around $50 million. This also includes BigStock royalties.)
While $0.67 per download doesn’t sound like a whole lot, consider this. Based on calculations published last month (here and here) Selling-Stock believes that iStockphoto only had about 10 million downloads in 2012. That would mean that Shutterstock had about 7.5 times as many downloads. Thus, on average, photographers might expect to have 7.5 times more downloads on Shutterstock than on iStock from an equal number of images. Thus, while the average return per download from iStock might be in the $2.50 to $4.00 range (figures we hear from many non-exclusive iStock contributors) that should be compared with a little of $5.00 ($0.67 X 7.5), not Shutterstock’s per download figure. This could explain why so many photographers are reporting higher revenue from Shutterstock than iStock, or any of the other online distributors.

Sales and Marketing

The company’s sales and marketing costs for 2012 was 26.6% of gross revenue. On a percentage basis this remained almost exactly the same as in 2011 when the company spent almost $32 million on sales and marketing.

Founder and CEO Jonathan Oringer explained earlier, “We use search engine marketing, display advertising, re-targeting networks and lots of other channels.  We are always looking at our less efficient channels and trying to optimize by moving some of that spend into more efficient channels.”

Revenue Per Image In The Collection

  Sept Dec Mar June Sept Dec Mar June Sept Dec
  2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
Download 11.1 12.5 13.3 14.4 14.8 16.2 17.6 18.3 18.7 21.4
Rev per DL $1.89 $1.91 $1.92 $2.01 $2.10 $2.14 $2.13 $2.22 $2.26 $2.30
Images 12.3 13.3 14.4 15.3 16.2 17.4 18.8 20.2 21.7 23.3
Total Rev $20.98 $23.88 $25.54 $28.94 $31.08 $34.67 $37.49 $40.63 $42.26 $49.22
Rev/ImCol $1.71 $1.80 $1.77 $1.89 $1.92 $1.99 $1.99 $2.01 $1.95 $2.11

Tim Bixby, CFO said, “Revenue per download also showed a nice increase, increasing 7% to $2.30 as compared to $2.14 in the same period a year ago. This increase in revenue per download as in past quarters continues to be driven by the mix of pricing plans that our customers select. We have a higher effective cost per download in certain pricing plans, particularly our direct sales efforts to larger customers and our on-demand plans both of which are growing faster than the overall business, and that has continued to cause the average revenue per download to increase over time.

“Note that we have not raised prices for several years and that this shift is due solely to mix shift. Notably, if we look only at incremental new customer revenue the split between on-demand and subscription is quite balanced, roughly 50/50.”
    (Additional clarification: The 50/50 was just for new revenue. The revenue split for the overall business is about 55% subscription, 35% on demand and 10% other. The on demand would also include the BigStock sales that are priced based on file size delivered.)


The company ended the quarter with 238 employees an increase of about 38% from 173 at the beginning of 2012. Bixby said, “The breakdown of these headcount additions represent where we are investing in people, and over the course of the year were as follows: about 50% of the adds were within our sales and marketing groups about 30% were within product and technology, and about 20% within our growth and acquisitions area.”

Shutterstock sells in more than 150 countries in 14 different languages including Hungarian, Czech, Turkish and Polish that they added in the fourth quarter. They accept payment in 9 currencies and currently sell to 750,000 paying customers. (The figure they used when they were doing the initial public offering was 550,000 indicating a substantial increase in 2012.) They ended the year with over 23.3 million images and 800,000 video clips in their collection and a total of 76 million downloads for the year. Shutterstock added about 5.6 million images (24% of its total) to its collection in 2012. Their 35,000 contributors come from more than 100 countries.

Photographers should keep in mind that vector illustrations are in much greater demand than photos. In 2011 vectors represented 32% of total downloads on Shutterstock. There is no reason to believe that there has been a dramatic change in the proportional share as usage has grown.


The Company's cash balance was $102.1 million at December 31, 2012 as compared to $14.1 million as of December 31, 2011.  The Company also had short-term debt of $6.0 million and no long-term debt as of December 31, 2012.  The Company generated $12.6 million of cash from operations in the fourth quarter of 2012 and $45.5 million of cash from operations in the full year 2012. 

Free cash flow for the fourth quarter of 2012 was $12.1 million as compared to $9.4 million in the fourth quarter of 2011.  Free cash flow for the full year of 2012 was $41.5 million as compared to $36.1 million in 2011.

Adjusted EBITDA

Adjusted EBITDA for the fourth quarter of 2012 was $11.3 million as compared to $7.3 million in the fourth quarter of 2011.  Adjusted EBITDA for the full year 2012 was $34.9 million as compared to $26.5 million in 2011.

EBITDA (earnings before, interest, taxes, depreciation and amortization) for 2013 is expected to be between $44.0 and $46.5 million. During 2013 the company is budgeting for capital expenditures related to network servers and technology of approximately $5 million and for leasehold improvements related to a headquarters office expansion/relocation of approximately $6 million.

Copyright © 2013 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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