The U.S. based Shutterstock (NYSE:SSTK) operates a two-sided marketplace for creative professionals to license content. The company has been investing smartly in its technology and products, while packaging optimization across its platform, allows customers to search and license the content according to their requirements.
Consequently, Shutterstock has observed all-time high customer engagement in fiscal 2017, both regarding the number of active users on its sites and the number of paid downloads.
Critical Operating Metrics compared to 2016
- Paid downloads was at 172.0 million, up 2%
- Revenue per download stood at $3.13, a growth of 12%
- Images rose to 170.1 million, up 46%
- Videos expanded to 9.1 million clips, 47% higher
Off the back of this strong performance, Shutterstock’s revenue of $557 million grew 12.7 percent from fiscal 2016.
On the negative side, the company couldn’t be able to turn the higher revenues into big profits as higher expenses impacted margins. Usually, early-stage companies have to invest actively in growth opportunities in an attempt to expand the market share.
Its operating expenses soared significantly to $144 million in FY2017 from $116 million in fiscal 2016. Thus, Shutterstock’s income from operations declined $19.4 million to $26.3 million in FY2017 from fiscal 2016.
The CEO said, “Through our innovation and execution, we continue to attract new customers and expand our workflow product offerings and penetrate deeper into international markets. Earlier this year, we celebrated a milestone of having 1 billion licenses to date, and we believe we are well-positioned for strong, profitable growth in 2018 and beyond.”
Stock Price Performance
SSTK stock price soared almost 34% in the last six months to $50; the market capitalization stands around $1.6 billion. Amid a considerable growth in share price and a meeker growth in earrings, the price to earnings ratio hovers in the range of 60 times, sharply higher from the industry average of 23 times.
Nevertheless, Shutterstock expects to generate higher revenue and earnings growth in 2018 – which could offer additional support to the share price. The company expects revenue growth in the range of 15% – 17%, while adjusted EBITDA is anticipated to grow at 19% – 25%.
Featured Image: twitter
