Shutterstock — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenue was $173.9 million, a 33% decrease compared to $260.1 million in the third quarter of 2025.
• Net loss was $197.8 million compared to net income of $13.4 million in the prior year period.
• Net loss per diluted common share was $5.35 compared to net income per diluted common share of $0.37.
• The net loss included a $195.6 million non-cash, after-tax goodwill impairment charge (GAAP statement lists $203.3 million pre-tax).
• Adjusted net income was $16.7 million, down from $36.4 million in the third quarter of 2025.
• Adjusted net income per diluted common share was $0.45, down from $0.99 in the third quarter of 2025.
• Adjusted EBITDA was $41.8 million, a 47% decrease from $79.4 million in the third quarter of 2025.
• Adjusted EBITDA margin was 24.0%, down from 30.5% in the third quarter of 2025.
• Net loss margin was 113.7%, compared to a net income margin of 5.1% in the third quarter of 2025.
• Cash and cash equivalents decreased by $22.7 million to $110.5 million at September 30, 2026, from $133.2 million at June 30, 2026.
• Net cash from operating activities was $18.3 million.
• Net cash used in investing activities was $9.8 million, primarily for capital expenditures.
• Net cash used in financing activities was $29.8 million, primarily due to $30.0 million in repayments on the revolving credit facility.
• Adjusted free cash flow was $12.5 million, a decrease of $62.7 million from the third quarter of 2025.
• Total debt decreased from $158.1 million (current) + $116.6 million (long-term) at December 31, 2025, to $128.1 million (current) + $114.4 million (long-term) at September 30, 2026.
• Deferred revenue decreased by $8.6 million during the quarter.

Guidance and Future Outlook

• Management stated they are on target to deliver $60 million in annualized run-rate operating expense reductions committed to in the second-quarter earnings announcement.
• The company reduced third-quarter Product Development and SG&A expenses by 30% year-over-year to $96 million, representing $39 million in quarterly savings.
• Total headcount was reduced by 16% year-to-date.
• Management indicated a focus on operational discipline and cost management while navigating headwinds in the core Content segment and deal timing volatility in Data Licensing.
• The company aims to position itself for long-term growth by leveraging its content library, data capabilities, and creative ecosystem relationships in the context of AI changing content production and consumption.

Business Segments and Product Lines

• Content product revenue was $158.1 million, a 19% decrease from the third quarter of 2025, representing 91% of total revenue.
• The reduction in Content revenue was driven primarily by weakness in new customer acquisition.
• Data, Distribution, and Services product revenue was $15.8 million, a 76% decrease from the third quarter of 2025, representing 9% of total revenue.
• Revenue recognition in the Data offering varies quarter-to-quarter based on the delivery timing of metadata licensed assets.
• Subscriber count at the end of the period was 890,000, down from 1,060,000 in the third quarter of 2025.
• Subscriber revenue was $95.1 million, down from $107.2 million in the third quarter of 2025.
• Average revenue per customer (last twelve months) was $289, up from $279 in the prior year period.
• Paid downloads were 90.9 million, down from 111.7 million in the third quarter of 2025.

Market and Competitive Landscape

• The company noted continued headwinds in its core Content segment.
• AI is identified as a fundamental force changing how creative content is produced and consumed.
• The company highlighted its position to build on strategic assets including its content library, data capabilities, and relationships across the creative ecosystem.

Risks and Challenges

• The company recorded a non-cash goodwill impairment charge of $203.3 million following a triggering event resulting from the impact of the dividend suspension announced on July 22, 2026.
• Operating costs did not decline at a similar rate to revenue declines.
• The company incurred $0.4 million in unrealized losses related to its investment in Meitu, Inc.
• Costs related to the proposed merger totaled $0.5 million.
• Strategic advisory and other fees amounted to $2.6 million.
• Workforce optimization expenses were $4.3 million.
• The press release references "Risk Factors" in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and subsequent filings as potential causes for results differing from expectations.

Management Commentary and Tone

• Jon Oringer, Chairman and CEO, stated the company maintained a strong focus on operational discipline and cost management.
• Oringer noted that the cost reduction actions strengthen the financial position and provide flexibility to focus on future opportunities.
• Oringer emphasized that AI creates new opportunities for Shutterstock to build on its assets.
• Hichame Assi was appointed President and COO to bring greater focus to operational performance and execution.
• The tone regarding the dividend suspension was that it was a triggering event for the goodwill impairment.
• Management expressed confidence in delivering the $60 million in annualized run-rate operating expense reductions.

Analyst Questions and Answers

• No analyst questions or answers were included in the provided press release text.

Other Key Points

• Rik Powell departed as Chief Financial Officer effective immediately, with an effective departure date of November 13, 2026.
• Scott Grossman, Senior Vice President, Global Head of Finance, assumed the role of Interim Chief Financial Officer effective immediately.
• The company suspended dividends, which was announced on July 22, 2026, and contributed to the goodwill impairment triggering event.
• The company received $0.1 million related to the receipt of Giphy Retention Compensation, reimbursed by the Giphy seller.
• The company incurred $4.3 million in payments related to the proposed merger during the quarter.
• The company incurred $35.0 million in legal contingency settlement costs during the nine months ended September 30, 2026 (noted in the Adjusted Free Cash Flow reconciliation).
• The company reported $2.6 million in strategic advisory and other fees for the quarter.
• The company reduced total headcount by 16% year-to-date.