Author Topic: Shares Plummet (Read 34577 times)

Pauws99 · « **on:** August 06, 2015, 11:42 »

Aug 6 2015, 12:30 ET | About: Shutterstock (SSTK) | By: Eric Jhonsa, SA News Editor

Shutterstock down 32.1% on weak guidance; CFO change announced

In addition to missing Q2 revenue estimates (while beating on EPS), Shutterstock (NYSE:SSTK) is guiding for Q3 revenue of $105M-$108M (below a $113.3M consensus) and 2015 revenue of $425M-$430M (below a $440.7M consensus). Full-year adjusted EBITDA guidance has been cut to $82M-$85M from $90M-$94M.
No explanation is given in the earnings release for the outlook. However, it arrives less than 2 months after Adobe (aided by the Fotolia acquisition) launched its Adobe Stock photo marketplace, while providing aggressive pricing and tight Creative Cloud integration.
Along with the numbers, Shutterstock has announced CFO Tim Bixby is leaving to "pursue other opportunities." Steven Burns, formerly the CFO of Tribune Media will succeed Bixby as CFO, and has resigned from the board.
Paid downloads rose 14% Y/Y in Q2, and revenue/download 13%. The size of Shutterstock's library rose 11% Q/Q and 47% Y/Y to 57.2M images.
Q2 results, PR

Adobe competition or investors wake up to over priced stock?

Sean Locke Photography · « **Reply #1 on:** August 06, 2015, 12:03 »

Ouch. Good thing I only put a couple hundred in there. Time to buy more?

stockastic · « **Reply #2 on:** August 06, 2015, 12:12 »

Well here we go. Now they start looking for big cost reductions, and we all know where that leads.

As soon as they cut royalties, I'm out. I'm actually sort of looking forward to it, getting closure as it were.

cobalt · « **Reply #3 on:** August 06, 2015, 12:24 »

the stock market is very volatile at the moment, not just because it is summer. Even apple was punished although they easily beat their own targets.

Might be a time to pick up something, but there is still is the general market volatility.

It would be helpful to hear data from adobe and the carlyle group how getty is doing.

Sean Locke Photography · « **Reply #4 on:** August 06, 2015, 12:26 »

http://www.bloomberg.com/news/articles/2015-07-30/carlyle-s-getty-images-debt-jumps-after-earnings-said-to-improve

Jo Ann Snover · « **Reply #5 on:** August 06, 2015, 12:36 »

Quote from: Sean Locke Photography on August 06, 2015, 12:26

http://www.bloomberg.com/news/articles/2015-07-30/carlyle-s-getty-images-debt-jumps-after-earnings-said-to-improve

Ouch! The microstock part - iStock and Thinkstock, I assume - down significantly from last year ($54.4m down from $65.4m)

Mantis · « **Reply #6 on:** August 06, 2015, 12:37 »

Quote from: stockastic on August 06, 2015, 12:12

Well here we go. Now they start looking for big cost reductions, and we all know where that leads.

As soon as they cut royalties, I'm out. I'm actually sort of looking forward to it, getting closure as it were.

That was my first thought.

Hongover · « **Reply #7 on:** August 06, 2015, 12:39 »

Twitter & Yelp has given the market a really sour taste on technology recently, along with the closure of HomeJoy and the massive layoffs at Good Eggs. Everybody talked about a tech bubble and last week's Twitter earnings call started the deflation of that bubble.

I think we're going to see a lot of volatility ahead before it stabilizes.

cobalt · « **Reply #8 on:** August 06, 2015, 13:08 »

So Getty lost around 10% in revenue. If that trend continues SS will be more than half of gettys revenue in 2015.

I actually think SS results are quite good, especially in the situation.

Now we need to hear from adobe

Jo Ann Snover · « **Reply #9 on:** August 06, 2015, 14:52 »

Here's a transcript of the earnings call today

http://seekingalpha.com/article/3408976-shutterstock-sstk-jonathan-oringer-on-q2-2015-results-earnings-call-transcript

There were a couple of interesting things. Revenue grew 27% and image collection growth was up 60% over last year's growth - which says where the pressure on our royalties is coming from.

Also interesting that the user base increased 25% but the enterprise customers grew 50% - they say 20K users, which probably means it's fewer companies (they're counting every person in the team packages?)

"...in the past year alone, the number of customers spending over $50,000 annually has doubled; and those spending over $100,000 has increased by nearly 70% (6:48). Our enterprise business now exceeds 20% of our overall revenue..."

With the 350 a month subscriptions, SS's take is much higher - where ours stays the same 38 cents max. Not sure that I like that.

SS revenue, if the buyer took all they were entitled to (which they don't) is 56.85 cents per d/l or 48.28 cents on the annual plan for 350 a month versus 33.2 cents or 26.53 on the annual plan with the 750 a month plans.

But from the link above from Bixby:

"On the gross margin side on the new products, our goal is for contributors to make a fair return. That is a key part of why our content library is so strong; if our contributors tend to come to us first, we pay out 28% or so of revenue across contributor base. Products on their own can have higher or lower royalty impacts, but we're seeing fairly consistent royalty rates across even the new products. It tends to be a little higher when you launch a new product then it comes down over time, because folks are testing, and without a limit they may download more. But the trend-lines are all going where we expect them to go. If we found that a new product had very strong uptake and great growth prospects, and it somehow had a higher download rate at a royalty or margin impact, we control that. We would have to decide and we would decide and our target is to continue to deliver that just under 30% return to our contributors. I expect that will continue to be very – part of the strategy going forward."

Pauws99 · « **Reply #10 on:** August 06, 2015, 14:56 »

For what its worth I think its a realisation that the stock was overvalued. Its always a worry when a CFO leaves to pursue "other opportunities" a revision to figures sometimes following.

The thing I find most amazing/worrying is that the no of images available has increased by 50% in a year specially since they don't seem to want mine!

I think they remained focussed on growth so I don't see a royalty cut.

Nice to see our Istock fanboys jumping all over Sstocks grave - premature I think Istock have more to worry about with their mountain of debt as opposed to SStocks war chest of cash (watch out Dreamstime?)

Pauws99 · « **Reply #11 on:** August 06, 2015, 15:19 »

I see they are not doing so well in Europe. Perhaps their shiny happy people in a shiny shadowless world style does not appeal so much to us glum Europeans and explains why Fotolia like my images more!

a and n · « **Reply #12 on:** August 06, 2015, 16:37 »

I own SS stock, and am very surprised it dropped 30% in one day on what I think is actually a good earnings report. Although, it was overvalued, they reported that they beat estimates so we should have seen an increase. Unless there is something I'm missing, this will be a good opportunity in my opinion to buy more shares. My only concern is that Adobestock could take more market share in the future, but based on my own revenues, I really don't see that happening.

Hongover · « **Reply #13 on:** August 06, 2015, 16:51 »

Quote from: a and n on August 06, 2015, 16:37

I own SS stock, and am very surprised it dropped 30% in one day on what I think is actually a good earnings report. Although, it was overvalued, they reported that they beat estimates so we should have seen an increase. Unless there is something I'm missing, this will be a good opportunity in my opinion to buy more shares. My only concern is that Adobestock could take more market share in the future, but based on my own revenues, I really don't see that happening.

They're expect lower sales for the next earnings report, so that's one of the main reason for the fall. The other contributing fact is the resignation of the CFO.

SS's market cap isn't really that overvalued. Given their revenue, they're pretty much inline with their market value for this kind of company. People are just down on tech media stock at the moment.

Nikovsk · « **Reply #14 on:** August 06, 2015, 16:51 »

Quote from: Sean Locke Photography on August 06, 2015, 12:03

Ouch. Good thing I only put a couple hundred in there. Time to buy more?

You gotta be kidding me. P/E is still sky high and the stock market bubble is about to burst.

Pauws99 · « **Reply #15 on:** August 06, 2015, 17:25 »

Quote from: a and n on August 06, 2015, 16:37

I own SS stock, and am very surprised it dropped 30% in one day on what I think is actually a good earnings report. Although, it was overvalued, they reported that they beat estimates so we should have seen an increase. Unless there is something I'm missing, this will be a good opportunity in my opinion to buy more shares. My only concern is that Adobestock could take more market share in the future, but based on my own revenues, I really don't see that happening.

You say yourself its overvalued - why do you expect an increase? The market looks at the future not the past and I think its spooked a bit by adobe. I own a (very) few shares but steer clear of IT too risky in my view.

PeterChigmaroff · « **Reply #16 on:** August 06, 2015, 18:39 »

I'll never understand why they make outlandish estimates then cry about it when they can't achieve them.

michaeldb · « **Reply #17 on:** August 06, 2015, 18:46 »

Quote from: Nikovsk on August 06, 2015, 16:51

Quote from: Sean Locke Photography on August 06, 2015, 12:03
Ouch. Good thing I only put a couple hundred in there. Time to buy more?

You gotta be kidding me. P/E is still sky high and the stock market bubble is about to burst.

Things do not look good for the overall market. The Fed is committing to higher interest rates but looks like it may have to do that in an economy which is not growing - that's bad medicine. Hence a lot people with profits in growth stocks are looking for reasons to sell and cash in now.

gbalex · « **Reply #18 on:** August 06, 2015, 19:40 »

Quote from: Pauws99 on August 06, 2015, 14:56

For what its worth I think its a realisation that the stock was overvalued. Its always a worry when a CFO leaves to pursue "other opportunities" a revision to figures sometimes following.

The thing I find most amazing/worrying is that the no of images available has increased by 50% in a year specially since they don't seem to want mine!

I think they remained focussed on growth so I don't see a royalty cut.

Nice to see our Istock fanboys jumping all over Sstocks grave - premature I think Istock have more to worry about with their mountain of debt as opposed to SStocks war chest of cash (watch out Dreamstime?)

I think it was a given that the team Insight Venture Capitol put in place would move on. They have provided the key players with a good portion of revenue in the form of free stock grants and they will now move on the the next lucrative IPO.

Tryingmybest · « **Reply #19 on:** August 06, 2015, 20:04 »

Oh well. No more gyms and free food for SS employees in the SS Tower.

LesPalenik · « **Reply #20 on:** August 06, 2015, 21:58 »

Big price drop on big volume. Looks like a lot of shares were dumped in one day.

gbalex · « **Reply #21 on:** August 07, 2015, 11:26 »

Some interesting questions coming out of the new earning call transcript.

http://seekingalpha.com/article/3408976-shutterstock-sstk-jonathan-oringer-on-q2-2015-results-earnings-call-transcript

Snip
Question-and-Answer Session

Youssef H. Squali - Cantor Fitzgerald Securities

Hi, thank you very much, a couple questions, please, if I may. Tim, can you go back to and maybe give us a little more clarity on exactly what happened in Europe?

I think you singled out Europe as the area of some weakness around your e-commerce offering and then you were launching the new products. So maybe just some more detail on that would be helpful.

And then on the a-la-carte service, I think Adobe's offering is priced more competitively than yours. Any plans to match pricing? And if not, how do you compete within that niche? Thanks.

Rohit R. Kulkarni - RBC Capital Markets LLC

And as far as the big-picture competitive environment is concerned, is there any linearity that you saw in terms of how customer acquisition, or your retention, or your churn trended over the last 12 weeks to 18 weeks around Adobe launch? And how do you think you need to react over the next six months or so?

Dean J. Prissman - Morgan Stanley & Co. LLC

Hey, guys; thanks for taking my questions. I know you talked about enterprise customer growth, but what was the enterprise revenue growth in the quarter, and how did it compare to last quarter? And then I think following upon Youssef's question, Jon, what if anything in the competitive environment would make you consider price cuts in your a-la-carte business? Thank you.

gbalex · « **Reply #22 on:** August 07, 2015, 11:30 »

http://seekingalpha.com/article/3408976-shutterstock-sstk-jonathan-oringer-on-q2-2015-results-earnings-call-transcript

Jonathan Oringer - Founder, Chairman & Chief Executive Officer

Snip

To ensure we are meeting the demands of existing customers while also attracting new users, we remain focused on building cutting-edge technology and introducing new and innovative product offerings.

A great example is our rollout during the second quarter of monthly subscriptions with no daily download limit. We also rolled out a smaller subscription offering for users who may not need as many images per month. While these new subscription offerings have some short-term financial implications which Tim will discuss in a moment, over time we expect them to drive additional subscription growth, extend average retention length, and increase lifetime customer value.

Snip

With more contributors than ever uploading their best content and a state-of-the-art processing operation and best images 24 hours a day, seven days a week, we believe we are well positioned to scale the supply-side of our marketplace for years to come. We see plenty of opportunities to invest even further, to create the best user experience for both customers and contributors, and we will continue to do so even if the ultimate return on that spend is not expected for quite some time.

Snip

Before I finished up, I'm sure that most of you have seen the announcement that Tim will be leaving Shutterstock and Steven Berns, one of our board members up until a few days ago, will be taking over the CFO role next month.

Timothy E. Bixby - Chief Financial Officer

Snip

While customer growth this past quarter remained quite strong, the number of new e-commerce customers was somewhat below our initial expectations, primarily due to some softness across much of Europe.

However, as Jon mentioned, we recently launched several new subscription offerings to better meet customer needs. The early signs have been encouraging, with subscription growth increasing versus the months before we introduced these products. There is one nuance surrounding the new product offerings that I want to mention, as it impacted reported revenues this past quarter and does have full-year implications.

While the new subscriptions are expected to lift average customer lifetime revenue, revenue recognition is somewhat more back-loaded to the end of each month rather than evenly spread across the month. And this is due to the monthly rather than daily download limitation. As a result, we saw an increase in deferred revenue due to this change, and we recognized roughly $2 million less in revenue during the second quarter than we likely would have had with no product changes. This impact will flow through the remainder of the year.

While customer expansion is certainly the biggest driver of our strong revenue growth, it is not the only metric that is growing nicely. Revenue per download increased 13%, and paid downloads increased 14% year-on-year, with the growth in revenue per download reflecting the impact of higher enterprise sales as well as continued momentum across video, editorial, and music products, all of which carry higher than average effective prices for Shutterstock.

Snip

The strongest growth driver continues to be our enterprise business as we further build our relationships with agencies, media organizations, and large enterprises, by adapting our core offerings to their needs. This was a business that barely existed several years ago and now has over 20,000 users, up over 50% from the second quarter in 2014.

etudiante_rapide · « **Reply #23 on:** August 07, 2015, 12:20 »

no surprise. a long time ago, some od chinaman wrote a big about how you run an army.
it said something like this...
you have problem with the army, you kill the generals.
you don't kill the soldiers.
you starve the soldiers, you lose the war.

or something like that in loss of translation due to mandarin book.
but more or less this is the base of many successful great modern business CEOs of big corporation.

ss failed this art of war lesson the moment they went public and listen to the shareholders.
they cut off their ricebowls as the chinamen call it. you do not cut off your ricebowl at any cost.
you cut off the heads of the generals, yes. but you never cut off the hands of the soldiers.

we are the soldiers. the fall of the shares reflect many months of the complaints by contrbutors.
investors are not stupid and do not read the ss forum.
the smart investors know the moment ss cut the hands of their little soldiers,
this is like pleasing the corrupt courtiers so they get rich quick but will cause the fall of the dynasty.

the emperor falls as long as the emperor does not follow the old rules of war.
ask any intelligent businessman and they will tell you the word of this old chinaman is not rubbish.
even the wisest of the millionaire in china like alibaba CEO etc all follow the words of
this old rule for running an army.

many businesses in my country who are not chinese (here speaks portuguese)
still follow the rules of ancient chinaman laotzu or what his name.

this is what happens when you listen to shareholders to cut off the hands of the soldiers
once they reach 38 cts a download and please the shareholders to placate those
who cheer when they reach payout once every 5 months.

BigBubba · « **Reply #24 on:** August 07, 2015, 12:34 »

I just took all my earnings from bigstock from July and bought SS stocks....or stock.

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Author Topic: Shares Plummet (Read 34577 times)

Pauws99

Sean Locke Photography

stockastic

cobalt

Sean Locke Photography

Jo Ann Snover

Mantis

Hongover

cobalt

Jo Ann Snover

Pauws99

Pauws99

a and n

Hongover

Nikovsk

Pauws99

PeterChigmaroff

michaeldb

gbalex

Tryingmybest

LesPalenik

gbalex

gbalex

etudiante_rapide

BigBubba

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