Shutterstock Reports $91.4 Million For Q4 2014

Posted on 2/13/2015 by Jim Pickerell | Printable Version | Comments (0)

Shutterstock has reported $91.2 million in revenue for Q4 2014, a 34% increase over Q4 2013. There were 33.5 downloads for the quarter. About 28 percent of revenue for the quarter was paid out to contributors in royalties. The average price per download was $2.68 up from $2.65 in the previous quarter and a 10% increase compared to Q4 2013. There were 46.8 million images in the collection at the end of 2014 plus 2 million video clips. At the end of the quarter the company had 513 employees worldwide.

Revenue for all of 2014 was $328 million, a 39% increase over 2013 revenue of $233 million. The total number of images downloaded in 2014 (including video clips) was 125.9 million. Adjusted EBITDA for 2014 increased 32% to $70.7 million, a 22% margin.

Net income for the fourth quarter of 2014 was $7 million as compared to $7.9 million in the fourth quarter of 2013. Net income available to common stockholders for the fourth quarter of 2014 was $7 million or $0.19 per share on a fully diluted basis as compared to $7.8 million or $0.22 per share on a fully diluted basis in the fourth quarter of 2013.

The company had $288.3 million in cash and equivalents on December 31, 2014 and it generated $82.9 million in cash for the full year of 2014.

Future Guidance

Revenue for Q1 2015 is expected to be between $94 and $96 million. Revenue for all of  2015 is expected to be between $436 and $444 million with adjusted EBITDA of $90 to $94 million. Capital expenditures are expected to be about $18 million.

Revenue And Download Trends

The chart below shows some of the trends in downloads, images in the collection and revenue growth since Q3 2012. (For earlier data going back to Q3 2010 see here.) The "Rev/Image" row is "revenue per image in the collection." For this figure I divide total revenue by the sum of still images and video clips since the video makes up a portion of the revenue.

  Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
  2012 2012 2013 2013 2013 2013 2014 2014 2014 2014
Downloads (millions) 18.7 21.4 22.4 24.3 25.4 28 29.7 31.5 31.2 33.5
Rev.per DL $2.26 $2.30 $2.28 $2.33 $2.35 $2.43 $2.45 $2.52 $2.65 $2.68
Images & Video 21.7 23.3 25 28 31.3 34.5 37.1 40.7 42.7 48.8
Total Rev. (millions) $42.26 $49.22 $51.5 $56.8 $56.8 $68 $72.8 $80.2 $83.7 $91.2
Rev/Image $1.95 $2.11 $1.98 $1.96 $1.81 $1.97 $1.96 $1.97 $1.96 $1.87
% Image Lic 86% 92% 89% 87% 81% 81% 80% 77% 73% 69%

The "% Image Lic” row measures the odds that a single image in the collection will have been licensed one time within the quarter. To arrive at this number we divide the total downloads by the number of images in the collection at the end of the quarter. This number is significant because it shows that new images are being added to the collection at a rate faster than image downloads are increasing. For example, if a contributor had 1000 images in the collection in Q4 2012 on average he would have had 920 downloads in that quarter. The same 1000 images in the collection in Q4 2014 would have only resulted in 690 downloads.


Several of the questions from analyst on the Earnings Call focused on trying to get a better understanding of the Enterprise aspect (including video) of Shutterstock's business.

Jonathan Oringer, Founder, Chairman and CEO of Shutterstock, said, “Our direct sales business to large enterprises continues to grow rapidly year-over-year and in Q4 represented more than 20% of total revenue.” Left unanswered was how much more than 20%.

CFO Timothy Bixby said, “Bixby said that the “subscription business and the core business (image-on-demand) used to be 100% of the business. Now its about two-thirds…”

When asked about the paid downloads figure Bixby said, “its worth noting … that paid download metrics become less useful to fully capture the health and trajectory of the business as we continue to migrate customers from our core subscription offering to our enterprise products.”

Back in December I estimated, based on reports through Q3, that Enterprise and Video made up about 25% of revenue. Here’s my breakdown.

  Revenue Percent Price per Percent
  Breakdown Total Rev Download Total DL
Subscription $134,480,000 41% $1.25 89.0%
Image on Demand $111,520,000 34% $11 8.0%
Enterprise $59,040,000 18% $20 2.5%
Video $22,960,000 7% $60 0.5%
  $328,000,000 100%   100%

As you can see, I thought Enterprise and Video combined were only going to represent about 25% of revenue for the year, not one-third. If these two categories represent just 30% of the year's revenue  – say 23% for Enterprise and 7% for video – the numbers might look like this.

  Revenue Percent Price per Downloads
  Breakdown Total Rev Download Per Category
Subscription $143,000,000 44% $1.25 114,400,000
IOD $86,000,000 26% $11 7,818,182
Enterprise $76,000,000 23% $20 3,800,000
Video $23,000,000 7% $60 383,333
  $328,000,000 100%   126,401,515

Note that almost 92% of the downloads are through subscriptions, but they only represent about 44% of  revenue.

Later when asked about the average revenue per enterprise sale and a follow-up on the potential for converting existing customers to enterprise accounts Oringer answered, “A couple of thoughts on that. Enterprise is a broad range of activity. You've got some customers and usage that’s at a - volume and a price point where they are paying $20 or $40 or $60 per image. You got other users who are using our premier license product at $200 and you’ve got Offset users at $500."

“It’s a very broad range. We don’t give our customer count and revenue for customer because of that.... The headline is significantly higher prices 10 to 100 overall (relative to subscription). With the acquisition of Editorial, we are seeing a similar kind of pricing impact 10 to 100 of dollars in licensing, same with video footage which is also very interesting to… a subset of our enterprise customers."

“And that second question I think there are very few enterprise accounts where we go in with a sales pitch that aren’t already active users at Shutterstock in one way or another - whether subscription or image-on-demand. But there is a tremendous number, several thousand, who are not customers today. We have dozens and dozen of enterprise customer, but there are lot’s who are potential Shutterstock users that aren’t today," Oringer continued.

During the question and answer session Bixby pointed out that, “there is quite a bit of activity in growth coming from areas that don’t trigger paid downloads at all.” For example the revenue from WebDAM and other workflow tools is not related to downloads.


Questioners also tried to gain some insight into the revenue generated by Rex Features and PremiumBeats in 2014. Bixby refused to provide any breakdown in revenue by product line. He did estimate the potential addressable market for music at about $500 million and for editorial at about $750 million. It is unclear what portion of that market Shutterstock is likely to capture.

It is interesting that Shutterstock’s projected revenue for Q1 2014 is between $94 and $96 million. That will include almost a full quarter of revenue generated by these two new properties. Thus, the increase in revenue from the previous quarter is expected to be about $5 million. Certainly a huge percentage of that growth will be from the business as it stood before these two brands were acquired.

Analyst Bram de Haas has reported that in 2011 annual revenue for PremiumBeats was about $1 million. They had a growth rate was between 30% and 35% which probably means that gross revenue today is in the $2 million range.

For more about these acquisitions check this link.

Other Insights From The Conference Call

When discussing revenue by region Bixby said, revenue for the quarter compared to a year earlier grew approximately 42% in North America, 29% in Europe and 32% in the rest of the world. Revenue by region in Q4 was 37% North America, 35% Europe and 28% rest of the world. He said that about 70% of revenue comes from customers outside the U.S. meaning that about 7% of North American revenue is from Canada and Mexico.

Sales and Marketing expenses were $21.2 million for the quarter or 23% of revenue. In Q3 marketing expenses were $21.1 million. For the year they were probably in the $80 million plus range.

Oringer reported that they now serve customers in 20 languages. In addition they have launched contributor platforms in Portugese and Korean bringing the total number of contributor languages supported to six. They have 12 offices across the U.S. and Europe including offices in London, Paris, Amsterdam and Berlin.

Copyright © 2015 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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