Shutterstock — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter ended September 30, 2026, was $173.9 million, a 33% decrease from $260.1 million in the same period in 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 in 2025.
• The net loss included a $195.6 million non-cash, after-tax goodwill impairment charge (reported as $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, compared to $0.99 in 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 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 provided by operating activities was $18.3 million, compared to $78.4 million in the prior year quarter.
• Adjusted free cash flow was $12.5 million, a decrease of $62.7 million from the third quarter of 2025.
• Deferred revenue decreased by $8.6 million during the quarter.
• Total debt (current and long-term) was $242.5 million ($128.1 million current, $114.4 million long-term) as of September 30, 2026, down from $274.7 million ($158.1 million current, $116.6 million long-term) as of December 31, 2025.

Guidance and Future Outlook:

• The company is on target to deliver $60 million in annualized run-rate operating expense reductions committed to in the second-quarter earnings announcement.
• Management stated it is focused on positioning Shutterstock for long-term growth by leveraging its content library, data capabilities, and relationships across the creative ecosystem.
• The company noted it is bringing greater focus to operational performance and execution under new leadership.

Business Segments and Product Lines:

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

Market and Competitive Landscape:

• Management cited continued headwinds in the core Content segment and deal timing volatility in Data Licensing.
• AI is described as fundamentally changing how creative content is produced and consumed, creating new opportunities for the company.

Risks and Challenges:

• The company recorded a goodwill impairment charge triggered by the impact of the dividend suspension announced on July 22, 2026.
• The company faced declines in revenue while operating costs did not decline at a similar rate.
• Specific charges included $0.4 million in unrealized losses on the investment in Meitu, Inc., $0.5 million in costs related to a proposed merger, $2.6 million in strategic advisory and other fees, and $4.3 million in workforce optimization expenses.
• The press release references risks discussed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and subsequent filings.

Management Commentary and Tone:

• Jon Oringer, Chairman and CEO, emphasized maintaining operational discipline and cost management while navigating headwinds.
• The company reduced 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.
• Hichame Assi was appointed President and COO to bring greater focus to operational performance and execution.
• Rik Powell departed as CFO effective November 13, 2026; Scott Grossman assumed the role of Interim CFO effective immediately.

Other Key Points:

• The company suspended dividends, which contributed to the goodwill impairment triggering event.
• The company received $0.1 million related to Giphy Retention Compensation reimbursement from the Giphy seller.
• The company paid $4.3 million in costs related to a proposed merger during the quarter.
• The company repaid $30.0 million on its revolving credit facility during the quarter.
• The company recorded $4.3 million in workforce optimization expenses.
• The company recorded $35.0 million in legal contingency settlement costs in the nine-month period (though not specified as a cash outflow in the three-month cash flow summary, it is listed in the Adjusted Free Cash Flow reconciliation for the nine months).
• The company reported $0.5 million in costs related to the proposed merger in the net loss reconciliation.