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Shutterstock, Inc. (SSTK)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $260.1M (+4% YoY) with Adjusted EBITDA of $79.4M and margin of 30.5%; net income margin fell to 5.1% on merger-related costs and higher taxes .
  • Against Wall Street consensus, revenue beat by ~$4.5M while adjusted EPS missed by $0.16; coverage was thin (3 revenue, 1 EPS estimate) — a mixed print that could drive near-term volatility (values from S&P Global)*.
  • Management highlighted strong Data, Distribution & Services growth (+40% YoY) and rising ARPC ($279 LTM), while Content revenue declined 5% YoY on weaker new customer acquisition .
  • Free cash flow surged: adjusted FCF of $75.2M in Q3 (+$29.6M YoY), cash rose to $165.5M; dividend continued at $0.33 per share .
  • No guidance or earnings call due to the pending Getty merger; UK CMA referred the deal to Phase 2, adding regulatory uncertainty and a key stock reaction catalyst .

What Went Well and What Went Wrong

  • What Went Well

    • Data, Distribution & Services accelerated: +40% YoY to $65.7M, supported by timing of data deal revenue recognition and broader AI/data demand .
    • Margins held strong: Adjusted EBITDA margin 30.5% (vs. 27.9% LY) for the second consecutive quarter over 30%; adjusted EBITDA up 13% YoY to $79.4M .
    • Management emphasized product value expansion: “including AI image, video, and audio generative models” within unlimited content offerings and growing new logos in data/services .

  • What Went Wrong

    • Content weakness: revenue fell 5% YoY to $194.4M, driven by softness in new customer acquisition despite Envato contribution .
    • EPS compressed: diluted EPS $0.37 (vs. $0.50 LY) as $7.1M merger-related professional fees and higher tax provision outweighed revenue/Envato profitability .
    • No guidance/call; CMA Phase 2 referral introduces timeline risk and regulatory overhang on the merger path .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$250.588 $242.620 $266.990 $260.094
Diluted EPS ($USD)$0.50 $0.53 $0.82 $0.37
Adjusted EPS ($USD)$1.31 $1.03 $1.19 $0.99
Adjusted EBITDA ($USD Millions)$69.997 $63.363 $82.236 $79.429
Adjusted EBITDA Margin %27.9% 26.1% 30.8% 30.5%
Net Income Margin %7.0% 7.7% 11.0% 5.1%
Segment RevenueQ3 2024Q1 2025Q2 2025Q3 2025
Content ($USD Millions)$203.713 $202.888 $199.796 $194.426
Data, Distribution & Services ($USD Millions)$46.875 $39.732 $67.194 $65.668
KPIsQ3 2024Q1 2025Q2 2025Q3 2025
Subscribers (end of period, thousands)1,105 1,079 1,073 1,060
Subscriber Revenue ($USD Millions)$113.1 $109.9 $108.0 $107.2
ARPC (LTM, $USD)$254 $244 $266 $279
Paid Downloads (Millions)112.3 120.9 112.6 111.7
Estimates vs Actuals (Q3 2025)ConsensusActualSurprise
Revenue ($USD Millions)255.597*260.094 +4.497 (+1.8%)*
Adjusted/Primary EPS ($USD)1.15*0.99 −0.16 (−14%)*
# of Estimates (Revenue / EPS)3* / 1*——

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial GuidanceQ3 2025Not provided (pending merger) Not provided (pending merger) Maintained
Quarterly Dividend per ShareQ3 2025$0.33 (declared 7/21 for 9/18 payment) $0.33 paid in Q3 ($11.7M total) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/Technology InitiativesQ2: “AI model inputs” and GIPHY distribution emphasized in broad suite ; Q1: focus on growth and margins Expanded AI services for model training/evaluation; integrating AI image/video/audio models into unlimited content Accelerating AI monetization and product integration
Regulatory/Legal (Merger)Q1/Q2: No call/guidance due to merger UK CMA Phase 2 referral; management “remains committed” Heightened regulatory scrutiny; prolonged timeline risk
Product MixQ2: Content +18% YoY; DDS +34% YoY ; Q1: Content +17% YoY Content −5% YoY; DDS +40% YoY; timing benefits from data deals Shift toward data/services; content softness
Regional Trends—North America +18% YoY; Europe −8%; RoW −11% Stronger NA mix; Europe/RoW headwinds
Cash FlowQ1 adj FCF $23.4M ; Q2 $17.5M Q3 adj FCF $75.2M; cash $165.5M Significant FCF/cash build in Q3
Operating ExpensesQ2 PD expense $20.8M Q3 PD expense $22.4M; reductions tied to lower non-recurring Giphy retention Normalizing opex; targeted investment continues

Management Commentary

  • “Revenue grew 4% on the back of the fast-growing Data, Distribution, and Services business, while Adjusted EBITDA margins remained over 30% for the second consecutive quarter, and Free Cash Flow significantly increased… we continue to improve the value proposition of our unlimited content products by including AI image, video, and audio generative models” — CEO Paul Hennessy .
  • “We remain committed to the merger and will continue to engage with the UK's Competition and Markets Authority and will work with Getty Images to expeditiously secure the necessary clearances.” — CEO Paul Hennessy .
  • “With this new suite of AI services, we're formalizing capabilities… to deliver end-to-end value for our partners.” — Daniel Mandell, SVP Data Licensing & AI .

Q&A Highlights

  • The company did not host an earnings conference call and did not provide guidance due to the pending Getty Images merger .
  • No Q&A was held; investor updates on the merger included acknowledgement of the UK CMA Phase 2 referral and continued engagement with regulators .

Estimates Context

  • Revenue beat consensus modestly (+~$4.5M; +1.8%); adjusted/primary EPS missed (−$0.16; −14%) as higher tax and $7.1M merger-related professional fees weighed on GAAP EPS despite margin strength and Envato contribution .
  • Coverage depth was limited (3 revenue, 1 EPS estimate), which can amplify dispersion in expectations (values from S&P Global)*.

Key Takeaways for Investors

  • Mix shift toward higher-growth, higher-margin data/services persists; watch durability of data deal timing and new AI services traction for sustained top-line resilience .
  • Content softness underscores importance of improving new customer acquisition; ARPC rising ($279 LTM) suggests monetization tailwinds even as subscriber counts trend lower .
  • Strong adjusted FCF ($75.2M) and liquidity ($165.5M cash) support continued dividends and strategic flexibility amid merger-related costs .
  • Regulatory overhang (UK CMA Phase 2) is a key event risk; absence of guidance/call increases uncertainty around near-term trajectory and may heighten volatility .
  • Margins remain robust (>30% adj. EBITDA) despite integration/merger costs; if content acquisition improves and non-recurring expenses fade, EPS leverage can re-accelerate .
  • Regional mix favoring North America (+18% YoY) offset by Europe/RoW declines; monitor macro and pricing dynamics by geography .
  • Short-term: trade the revenue beat vs EPS miss and regulatory headline risk; medium-term: thesis hinges on scaling AI/data services, Envato integration, and merger path clarity .