Shutterstock posted its Q2 2022 financial results yesterday (July 26) and in the earnings call, tried to put an upbeat spin on results that missed what analysts had been expecting. The stock ended the day at $54.40, down, but not as bad as the early morning reaction which had it at $50.04.

https://www.nasdaq.com/articles/why-shutterstock-is-falling-hard-today

Investor relations site:

https://content.shutterstock.com/investor-report/index.html

Press release:

https://investor.shutterstock.com/node/12451/pdf

Earnings call transcript

https://seekingalpha.com/article/4525885-shutterstock-inc-sstk-ceo-paul-hennessy-on-q2-2022-results-earnings-call-transcript

Perhaps the disappointing financials account for a reduction in the amount of capital SS projects it will return to shareholders in 2022. It was $132 million in the Q1 estimate but is now $105 million - that's still almost double the $58 million returned in 2021. Not sure it's good news for contributors, but it could have been worse if they'd kept to their earlier number when revenues were weak.

Even though revenues increased, that appeared to be largely a result of acquisitions, not any growth in their existing business - at some point they'll run out of things to acquire

"E-commerce revenue growth was primarily driven by revenue generated from our acquisitions of PicMonkey and Pond5. Revenue from our Enterprise sales channel increased 15% as compared to the second quarter of 2021, to $79.5 million, and represented 38% of second quarter revenue in 2022. Enterprise revenue growth was driven by our multi-asset product offerings and continued momentum in Shutterstock Studios and Shutterstock Editorial. Enterprise revenue growth also benefited from our acquisitions of Pond5 and Splash News."

Subscriber revenue in Q2 was down from Q1 ($84.7m vs $85.4m) even though up over Q2 2021. In the earnings call, the new CEO boasted about the number of customers: "...on our marketplace, 2.1 million customers purchased content from a community of 2.2 million contributors. That's a contributor base that is larger than our nearest competitor by 4X.". In the Subscribers chart from the investor site, it says Shutterstock has 368,000 subscribers in Q2, up from 359k in Q1 (and they note that those numbers excludes PicMonkey, Pond5 and Splash News). Not sure where the rest of the 2.1 million came from as I'm guessing the enterprise business is smaller numbers than the e-commerce business.

As far as the boast about number of contributors goes, I think it's fair to say that all those hopeless portfolios of less than 500 unsaleable images mean nothing to the agency's success or a customer's view of the freshness or quality of content. I took a look at new photo content on Shutterstock just a few minutes ago and some of it is truly dismal - there is good work there too, but their boast about having the best/largest library would be more interesting if they tightened up their inspections:

"... we have the freshest content from around the world with 5 million to 10 million assets being added every single quarter. Our content library is by far the largest and deepest by a significant margin with 484 million creative and editorial images... In short, from a customer perspective as a result of Shutterstock's extensive growing library and ability to service the right content it means that Shutterstock is the go to destination for your content needs whether for example you are a creative professional, a small business owner, or a marketing professional. ... Ultimately world class content is the lifeblood of Shutterstock's business and the reason why we are the dominant player in the market."

Whether or not the analysts bought this view of Shutterstock's place in the market isn't clear, but the first question was asking for detail on why Shutterstock was confident that their content was going to bring about the results they predicted. This was the CEO's answer:

"We've got the leading position in contributors, the leading position in content acquisition. We've done some acquisitions to further bolster our position in content and we understand that getting the right content and putting it in front of our customers so that they can actually convert better, drives the fly wheel forward. "

The answer from the finance guy about which customer segments looked to be strong & growing vs. weaker mentioned Shutterstock moving from serving creatives to offering tools so that anyone could be a creative. That translates to me as competing with Canva which as far as I can see is the leader in that area. He mentioned "... tools first, template driven design tool subscription...", Creative Flow, which launched last month

https://www.shutterstock.com/blog/introducing-creative-flow-create-with-confidence
https://www.shutterstock.com/pricing/creative-flow

Not sure what image use as part of Creative Flow means for contributors - possibly a subscription royalty?

Hennessy was asked a question about how SS was going to manage growth and this word salad was his answer:

"When I talked about investing for growth in our channels, we're going to obviously make sure that our core continues to be healthy. And in places where we see now new opportunities, and again, we talked a lot about enterprise, there are large scale customers that want what we have. And we're going to enable that, and we're going to enable that fast because as we enable that quickly, that widens and deepens our competitive mode. So that's really what I mean, but we will be responsible stewards of our investors' capital and the capital that we kick off from our business. And, again we'll stay the course in terms of delivering high value for our shareholders and long-term margin expansion."

2.2 million contributors with "5 million to 10 million assets being added every single quarter."

2 to 5 uploads per contributor in quarter. I wonder how many active contributor they have.

Do we know exactly how much is paid out to contibutors?

Quote from: Unamas on July 28, 2022, 12:28

2.2 million contributors with "5 million to 10 million assets being added every single quarter."

2 to 5 uploads per contributor in quarter. I wonder how many active contributor they have.

Good point, which I have also mentioned for years. How many active contributors and how many are people who have an account, which is either dormant or abandoned or has never had an image accepted. And how many people uploaded, believing they could make easy money and will never cash out ever, because it could take up to 350 downloads.

There are still active and high volume, hard working people, but the numbers for contributors have always been tainted and inflated.

A chap sent me this message (attached) on Facebook back in February this year. Careful reading this aloud, listeners might think you're talking about something completely different. 

Just had a look at the port, doesn't look like it's grown much. Probably didn't get enough downloads to feel motivated to continue.

Link to account here: https://www.shutterstock.com/g/sarath+bandara

Quote from: Unamas on July 28, 2022, 12:28

2.2 million contributors with "5 million to 10 million assets being added every single quarter."

2 to 5 uploads per contributor in quarter. I wonder how many active contributor they have.

As far as I see more than 90% content is pure garbage.

I'd agree. Interesting how much they reject (if you read what people here post) and at the same time how much garbage still gets accepted.