Shutterstock stock faces sharp Q3 loss as revenue falls 33 percent

Shutterstock reported a sharp deterioration in its third-quarter results on November 5, with revenue falling to 173.9 million US dollars for the period ended September 30. The company recorded a net loss of 197.8 million US dollars, compared with net income of 13.4 million US dollars a year earlier.

Shutterstock stock traded at 2.68 euros on Lang & Schwarz at 1:45 p.m. CET on Tuesday, November 10.

Revenue weakness broadens

The company's investor release said total revenue declined 33 percent from the year-earlier quarter. Content revenue fell 19 percent to 158.1 million US dollars, which management attributed primarily to weaker new-customer acquisition. Revenue from Data, Distribution and Services dropped 76 percent to 15.8 million US dollars, with delivery timing also affecting the data business.

Adjusted results remained positive but weakened. Adjusted net income declined to 16.7 million US dollars from 36.4 million US dollars, while adjusted EBITDA fell 47 percent to 41.8 million US dollars. The adjusted EBITDA margin narrowed to 24.0 percent from 30.5 percent.

Impairment drives reported loss

The reported loss included a 203.3 million US dollar non-cash goodwill impairment charge, equivalent to 195.6 million US dollars after tax. Shutterstock said the charge followed a triggering event linked to the dividend suspension announced on July 22. Other expenses included strategic advisory fees, workforce optimization costs and merger-related expenses.

Management said product development and selling, general and administrative expenses were reduced by 30 percent year over year to 96 million US dollars. The company also said headcount was down 16 percent year to date and that it remained on track for 60 million US dollars in annualized run-rate operating expense reductions.

Finance leadership also changes

Scott Grossman assumed the interim chief financial officer role effective November 2. Rik Powell ceased serving as CFO on the same date and is scheduled to leave Shutterstock on November 13. Investors will now watch whether the cost program can offset ongoing pressure in content demand and data licensing.

US equities remain the relevant market context for investors following the S&P 500.

More news and analyses on Shutterstock stock.