Shutterstock, Inc. Q3 FY2024 earnings call

• Paul Hennessy noted record third quarter revenues and adjusted EBITDA, thanking the team. - Welcomed the Envato team, with Envato Elements showing strong product-market fit. - Announced Jarrod Yahes will leave; Rik Powell to become CFO. - Content segment: Despite excluding Envato, showed improvement with AI-generated content driving incrementality. - Data segment: Saw new customer demand and land-and-expand opportunities with existing customers. - Distribution segment: Giphy had strong viewership growth and is being monetized with sales hires. - Services segment: Shutterstock Studios had double-digit revenue growth from Q3 2022.

In Q3 2024, Shutterstock delivered record revenues of $251 million. Content segment achieved revenues of $204 million, a 14% year-over-year growth. Envato contributed $38 million to Content revenues in Q3. Excluding Envato, Content revenues declined 7% year-over-year but showed improvement from prior quarters. Data, Distribution and Services segment had revenues of $47 million. Giphy in Distribution saw Q3 views reach ~19 billion per day, up over 10% YOY. Shutterstock Studios in Services had revenues more than double that of Q3 2023.

• Raised revenue guidance to $935 million to $940 million, representing 7% to 7.5% YOY growth. - Adjusted net income per diluted share guidance increased to $4.22 per share to $4.31 per share. - Adjusted EBITDA guidance increased to $247 million to $250 million, including expected $9 million of M&A costs for the full year. - Adjusted EBITDA expected to be 24% to 25% in Q4.

• Actual results could differ materially from forward-looking statements. - Risks discussed in Form 10-K, including factors affecting actual results differing from forecasts, non-GAAP measure reconciliations, etc.

Q: What was the revenue contribution of Giphy in 3Q and thoughts on TikTok monetization?

A: Jarrod Yahes said Giphy is part of Data, Distribution and Services segment growing 40% YTD. Paul Hennessy was bullish on Giphy's monetization potential with TikTok deal.

Q: On Content side excluding Envato, trajectory of recovery and Data visibility?

A: Paul Hennessy said Content ex-Envato is improving with Q4 expected better than prior quarters. Jarrod Yahes said Data had ~$60 million visibility at start of year, will finish over $100 million, with land-and-expand opportunities making it more visible.

Q: Envato growth and standalone sustainability?

A: Paul Hennessy said Envato is outperforming with strong brand refresh and site improvements, more bullish on its growth now.

Q: Data sales to past customers and Distribution with smaller companies?

A: Jarrod Yahes said existing Data customers are making incremental purchases and re-licensing, with opportunities in industry vertical specific applications and smaller companies building bespoke models.

Q: Interaction between Envato and traditional Content products and Data sales force ramp?

A: Paul Hennessy said Envato and traditional products complement each other. Jarrod Yahes talked about hiring Data sales force globally and partnerships with venture capital firms and service providers.

Q: AI in Content and Distribution with smaller companies?

A: Paul Hennessy said AI in Content is additive with stock content use maintaining and growing, and Distribution has opportunities with smaller companies building bespoke models.