Shutterfly, Inc. (NASDAQ:SFLY)
Q2 2017 Earnings Conference Call
July 25, 2017 05:00 PM ET
Christopher North - Chief Executive Officer
Mike Pope - Chief Financial Officer
Shawn Tabak - Vice President of Investor Relations
Brian Fitzgerald - Jefferies Inc
Colin Sebastian - Robert W. Baird
Heath Terry - Goldman Sachs
Kerry Rice - Needham & Company
Mark Mahaney - RBC Capital Markets
Good day. And welcome to Shutterfly Second Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded.
I would now like to turn the conference over to Shawn Tabak, Vice President of Investor Relations. Please go ahead.
Thank you, Operator. Good afternoon, everyone. Welcome to Shutterfly's second quarter 2017 earnings call. With us today are, Christopher North, our Chief Executive Officer and Mike Pope, our Chief Financial Officer. By now, you should have received a copy of our earnings press release, which crossed the wire just after the market closed. If you need a copy of the press release, please go to shutterflyinc.com to find an electronic copy. Our presentation is also available on our investor relations site. The audio of this conference call is being recorded for playback purposes, and a replay will be made available within a few hours.
Before we begin, I would like to note that our discussion today may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements include statements about our business outlook and strategy and the assumptions underlying those statements, and statements about historical results that may suggest trends for our business. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business, in general, we refer you to the risk factors section of our most recent Form 10-K and Form 10-Q, and our other filings with the SEC.
I would also like to note that any forward-looking statements made on this call reflect information and analysis as of today, and we assume no obligation to update this information. This information may contain certain financial performance measures that are different from financial measures calculated in accordance with GAAP, and may be different from calculations or measures made by other companies. A quantitative reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is available on the Investor Relations section of our Web site at shutterflyinc.com.
Now, I would like to turn the call over to Chris. Chris?
Thanks, Shawn. I'd like to welcome all of you to the Shutterfly’s Second Quarter 2017 Earnings Call. Today, I'll start by showing an overview of our quarterly results. I'll then go on to discuss the progress we've made against our areas of strategic focus, as well as against our platform consolidation and restructuring initiatives in our consumer business. After that, Mike will share the details behind our second quarter financial results, as well as our third quarter and full year 2017 outlook.
We had a solid second quarter with net revenues of $209 million. We saw mid single digit growth from our flagship Shutterfly brand, as well as continued growth in Shutterfly Business Solutions or SBS. We were pleased by the continued strong growth in Shutterfly’s home decor and personalized gift categories, supported by our strategy of expanding the range of products we sell. As anticipated, healthy Shutterfly brand growth continues to be offset by declining revenue in the non-Shutterfly brands collectively. Normalized adjusted EBITDA for the second quarter was $17.4 million at the high end of our guidance range, thanks to careful expense control.
Moving onto our areas of strategic focus, I'll remind you that our growth plan has four components; offering customers a broader range of products; pivoting towards mobile; making purchasing personalized products simple; and leveraging our manufacturing platform. Today, I’d like to focus on two of those four, on mobile and our manufacturing platform.
We’re very excited about the progress we’re making in mobile. The team is innovating rapidly, typically shipping updates to our apps twice per month. In the last quarter, we launched photo books for android users for the first time, and extended the range of products and designs in the app, including panoramic prints, notebooks, class ordainments, luggage tags, birth announcement and thank you cards, among others. We also launched improved text options in the app, as well as an enhanced creation experience for photo gifts and home décor, including multi-image layouts.
We’re also seeing a lot of success with our marketing efforts to drive new and existing customers to the app with more than 1 million downloads of our app again in the second quarter. Mobile sales, including both mobile web and mobile app, accounted for approximately 25% of second quarter Shutterfly brand revenue versus 19% in the second quarter of 2016, an increase of more than 600 basis points year-over-year.
Overall, mobile continues to grow at a significantly faster rate than our desktop business, and will become an important source of overall growth of the Company over the next two to three years as existing customers who installed the app increased their annual spending with Shutterfly and as we’re able to acquire a new customers to the app at a significantly lower cost for new customer than on the desktop Web site.
Shifting to our manufacturing platform, we continue to expand our lead as the world’s leading four-color digital printer. Our focus is on continuing to increase our advantage on quality, as well as cost while using automation to reduce our reliance on seasonal labor. As a reminder, last year we upgraded roughly half of our color printer fleet, which performed well for us over Q4 in terms of quality, cost and reliability. In the second quarter of this year, we signed a follow on deal with HP to upgrade most of the remaining color fleet to HP’s best in class printers.
In our SBS business, second quarter revenues were $29.9 million, a 10% increase over the second quarter of 2016. This increase is lower than we’ve seen in recent quarters, but as we’ve often noted, the SBS business can be lumpy from quarter-to-quarter, based on order timing and the marketing cadence of our customers. We remain highly confident in our full year outlook for 20% top line growth. And indeed, we were even successful in winning new business from existing key customers. I'm also thrilled to report that Scott Arnold has joined us as President of our enterprise division where he will build on the great foundations that our Chief Operations Officer, Dwayne Black and the SBS team have built over the last seven years. With a great track record in leading B2B companies, including as CEO of Absense, CEO of Market Tool, COO of Borland Software and partner at Mackenzie. Scott will be responsible for building and executing our long term enterprise strategy to leverage Shutterfly's world class digital manufacturing platform on behalf of business customers.
Now, I'd like to turn to our platform consolidation and restructuring initiatives. You'll remember that earlier this year we announced plans to simplify our consumer business, refocusing our resources on a small number of high potential opportunities while reducing overhead cost and moving towards a single consumer technical platform. We continue to be on track to complete the restructuring prior to Q4, and to realize the projected cost saving.
With respect to the platform consolidation initiative, in the second quarter, we reached our most important milestone, the migration of the Tiny Prints boutique to Shutterfly.com. As a reminder, Tiny Prints is our second largest consumer brand, significantly larger than the other non-Shutterfly brands and has a loyal customer base.
With the Tiny Prints new boutique successfully launched, our focus is now on migrating those Tiny Prints customers to the new site. Meanwhile, the launch of the new Shutterfly wedding store is on track for completion in the third quarter. At which point, we will shutter the legacy wedding paper divas site. The new Tiny Prints boutique launched on Shutterfly.com on June 28th, Tiny Prints customers now have a stylish new home with an upgraded look and feel and a selection of premium designs clearly distinct from those on Shutterfly.
At launch, we also unveiled a limited edition selection, featuring beautiful stationary designs from three trend forward artists, reinforcing Tiny Prints’ commitment to industry leading design. Tiny Prints will launch additional products, designs and services between now and Q4.
In addition to these Tiny Prints specific benefits, Tiny Prints customers also now have access to the Shutterfly photos, cloud photo management service, as well as an optimized mobile Web experience. And customers of both Tiny Prints and Shutterfly now benefit from a single shopping cart across brands, allowing easy cross-prem purchases, a single shared account, including login, payment, address book and purchase history and a single customer care platform and team. We've made it simple for customers to discover and migrate to the new Tiny Prints experience. A targeted marketing campaign invites Tiny Prints customers to its new home, while highlighting the many benefits of the new platform.
The account migration process is quick and simple. With just a few clicks, Tiny Prints’ customers can migrate their legacy account to Shutterfly.com, including save photos, address book and account credits. Our customer care teams supporting these migration efforts with tailored communication. Going forward, we'll continue to have dedicated marketing for Tiny Prints. And naturally, our old URLs and links automatically redirect to the new experience to even customers who aren't aware of the transition will be led to Tiny Prints’ new home.
As you can imagine, we're carefully monitoring how Tiny Prints’ customers are settling in with the new platform, and we're pleased with the early read. So overall, we've made excellent progress in both our restructuring and platform consolidation initiatives with the most important deliverables now behind us, and the remainder of the initiatives on schedule. If we step back and look at the second quarter, overall, we had a successful quarter both operationally and strategically.
Now, I'll hand it over to Mike to talk more in detail about our financial results and guidance.
Thank you, Chris and good afternoon everyone. Overall, our results for the second quarter showed strength in the Shutterfly brand offset by a collective decline in the non-Shutterfly brands. Normalized adjusted EBITDA of $17.4 million was at the high end of our guidance range with strong expense control in the quarter. The Company incurred restructuring charges of $4.7 million and lease termination charges related to the HP printer upgrade of $8.1 million in the second quarter.
As noted in our press release, during the quarter, we took advantage of an opportunity to complete the upgrade of our printer fleet, which we expect will benefit us through improved quality, increased throughput and automation, as well as lower consumable cost. This is a great deal for Shutterfly. As part of the transaction, we purchased leased equipment from the existing vendor for $21.6 million and immediately resold that equipment to HP for $20.5 million, resulting in a minimal cash outlay of $1.1 million. We expect the new upgraded equipment that we are leasing to result in approximately $15 million of expense savings over the next five years.
Under GAAP, the purchase of our existing leased equipment reduced the Company’s previously recorded future capital lease obligations on the balance sheet by $12.2 million, and resulted in a balance sheet write-off of $8.1 million, which is recognized in our income statement in operating expenses in the line entitled, Capital Lease Termination. The remaining $1.3 million was recorded on the balance sheet as a capital expenditure. Please note that gross profit, operating loss, adjusted EBITDA and net loss amounts quoted in the remainder of these remarks in the accompanying presentation are normalized for these restructuring charges and lease termination charges.
Net revenues for the second quarter totaled $209 million, representing an increase of 2% over the prior year. As communicated previously, we have forecasted 2017 net revenues to be relatively flat with the prior year as growth in the Shutterfly brand and SBS is offset by a forecasted loss of revenue in those businesses being shut down and lower revenue in those businesses being migrated to the Shutterfly.com platform. In the quarter, consumer revenue grew 1% over the prior year to $179.1 million, driven by our Shutterfly brand, which grew in the mid single-digits over the second quarter of 2016. The Shutterfly brand saw a strong performance in the home décor and personalized gift categories and in mobile.
Net revenues from our SBS business grew 10% over the prior year to $29.9 million. The strength of our product offering in SBS has continued to complement our land and expand approach. We also expanded our relationship with key clients, adding to our confidence in our full year outlook of 20% growth in this business.
In the second quarter, total unique customers grew 3% to $3.4 million, driven by growth in the Shutterfly brand and offset by the non-Shutterfly brands. We generated 5.5 million orders across our brands, an increase of 3% over the prior year. Average order value or AOV for the quarter was $32.75, a 2% decrease from the same period a year ago, primarily due to a higher level of promotions and a greater mobile mix.
Normalized gross margin of 43.5% decreased 280 basis points from the second quarter of 2016. In the second quarter of 2017, normalized consumer gross margin was 48.6%, a decrease of 310 basis points over the second quarter of 2016, primarily due to product mix, promotions and mobile mix. We did increased promotions in the second quarter as expected to keep customers engaged as we consolidate our non-Shutterfly brands toward a single consumer platform. SBS gross margin in the second quarter of 2017 was 20.2%, flat with the second quarter of 2016.
Normalized operating expenses for the quarter totaled $109.9 million, a 4.8% decrease over the prior year and decreasing 400 basis points to 53% of net revenues. Looking more specifically at our operating expense components, technology and development cost totaled $39.4 million for the quarter, a decrease of 5% over the prior year at 19% of net revenues. In the second quarter, we invested in mobile, simplifying customer experience, the consumer platform consolidation in our SBS business.
Sales and marketing expenses totaled $43 million in the quarter, a decrease of 10% over the prior year and decreasing 270 basis points to 21% of net revenues, largely driven by a decrease in external marketing spend as we migrate our smaller brands to the more efficient Shutterfly brand and platform.
General and administrative expenses for the quarter totaled $27.5 million, an increase of 3% over the prior year and remaining flat at 13% of net revenues. As previously announced, our restructuring plan includes the headcount reduction of approximately 13% or 260 positions. As of the second quarter, approximately half of these positions have been eliminated at the Company. The remaining positions will be eliminated in the third quarter of this year.
Our normalized operating loss for the quarter was $19.1 million; our normalized adjusted EBITDA for the quarter $17.4 million; the effective tax rate for the quarter was 39.2%. Our normalized net loss for the quarter totaled $14.9 million or $0.44 per share; the weighted average shares used to calculate the net loss per share totaled 33.6 million shares.
Cash and total investments as of June 30th totaled $187.6 million, decreasing $142.4 million from 2016 year-end. Our decreasing cash was largely driven by normal seasonal changes in working capital, capital expenditures, and share repurchases. Capital expenditures during the quarter totaled $16.9 million.
I'll now turn to our share repurchases. In the quarter, we repurchased the total of 603,000 shares for $30 million, bringing our year-to-date repurchases to just over 1 million shares. At this time, we anticipate repurchasing approximately $16 million of additional shares over the second half of 2017, bringing total estimated share repurchases for 2017 to $110 million, which approximates annual cash expected to be generated in the full year 2017. The share repurchase program continues our long term capital allocation strategy, which aims to maximize shareholder value while maintaining flexibility to make strategic investments.
As of June 30, 2017, we had $172.8 million remaining under our authorized share repurchase program. Lastly, you will note that our convertible senior notes, which are due in May of 2018, moved from long term liabilities to current liabilities as we are now within one year of maturity. We are currently evaluating a number of alternatives and expect to complete financing before year end.
I will now turn to our third quarter and full year financial guidance. Our full year financial guidance excludes pre-tax lease termination charges of $8.1 million and restructuring charges. We now expect our restructuring charges to range from $15 million to $17.5 million, down from the previous estimates of $15 million to $20 million. For the third quarter of 2017, we expect total net revenues to range from $187 million to $193 million.
We expect the gross margin of 35% to 35.5% and an operating loss ranging from $38 million to $35 million. We expect an adjusted EBITDA ranging from breakeven to $3 million with earnings per share ranging from a loss of $0.80 per share to a loss of $0.76 per share based on 33.6 million basic weighted average shares outstanding and 38% effective tax rate. For the full year, we are pleased to reiterate our guidance.
Net revenues are expected to be in the range of $1.135 billion to $1.165 billion with 20% growth in our SBS business. Gross margins are expected to be in the range of 49% to 50%, and operating income ranging from $48.5 million to $68.5 million. And lastly, adjusted EBITDA is expected to be in the range of $210 million to $230 million with earnings per share ranging from $0.45 to $0.80 per share based on 37.5% effective tax rate and 34.5 million diluted weighted average shares outstanding and capital expenditures of $75 million.
That concludes our prepared remarks for today. We will now open the call up for your questions.
We will now begin the question-and-answer session [Operator Instructions]. And our first question comes from Brian Fitzgerald with Jefferies. Please go ahead.
Couple of questions around transitions, as you transition Tiny Prints to the boutique and Shutterfly. Has user churn, how's that compared versus your initial expectations and have you noticed early signs in terms of willingness to spend more on the Shutterfly platform from these customers? And one follow on also, any surprises that you learned with -- or lessons learned with the Tiny Prints migration that you can apply to winning Paper Divas in terms of optimizing the process or cadence around process?
Yes, the first thing I'd say is that we're really pleased with the launch of the new -- Tiny Prints boutique on Shutterfly.com. And I'll just remind everyone that this is the most important milestone in our platform migration initiative. So to have that behind us is a big deal. We're very, very early and we're just a couple weeks in right now, so I think it's early to really be detecting any significant trends. But everything we're seeing so far we're really pleased with.
In terms of your last question about what we can learn what Wedding Paper Divas, I think having this behind us gives us confidence in the Wedding Paper Divas timing to remind you that we're planning to migrate Wedding Paper Divas’ customers over to the new Shutterfly wedding store in Q3 -- we'll be launching the new Shutterfly wedding store in Q3 and migrating the Wedding Paper Divas’ customers. So I think we're on track for that as well. Thanks.
And our next question comes from Colin Sebastian with Robert Baird. Please go ahead.
Nice to see that operations and restructuring are on track, so just a couple of questions. First off, just reconcile lower AOV with the acceleration and transacting customers if you could help us understand those may be in parts? And Mike just clarifying the full year net income guidance does not include the capital lease termination and related to that. Are you anticipating any operating expense savings in the current year from the most recent printer upgrades? Thanks.
So with regard to AOV within the quarter, I think as I’ve said many times and as we anticipated this year as we go through the platform migration and need to keep the customers engaged through the year, particularly as we go to the fourth quarter. We anticipate that we'll be more promotional throughout the year and we were in fact that again in the second quarter. Additionally, as we've said before with our success in mobile, the average order size on mobile tends to be lower than it is on the desktop.
I'll remind you, our belief is that those customers will frequent Shutterfly more often and ultimately have more transactions with us. But on an average order value, that tends to have a negative effect. With regard to the second part of your question, as to whether net income or our guidance for the full year includes the lease termination charge, it does not. It both excludes, as we've said in our prepared remarks, the restructuring expenses in 2017, as well as the lease termination charge.
And no benefit this year from operating…
The last part of your question is we actually do expect that have a benefit in the fourth quarter of the year. However, we anticipated getting this done -- when we're going to get it done, so it's already built into the previous guidance.
And our next question comes from Heath Terry with Goldman Sachs. Please go ahead.
I was just curious if you could give us a bit of an update on the digital only usage that you’ve got just around Shutterfly digital storage and how people are using that as a platform to share photos? And what cross over engagement you’re seeing in terms of the print business activating out of that base?
So I think as we’ve being seeing over the last couple of quarters since the transition to the new Shutterfly Photos expands, we’ve been pleased to see the level of engagement with the customers have with Shutterfly Photos. We’ve been seeing them engage everything from pure digital features, whether it’s uploading their photos, favoriting organizing then into albums, sharing them, using the facial recognition features, but also in a ways that that can lead to purchase.
And just as a reminder prior to Shutterfly Photos customers pretty much exclusively would first chose the project they wanted to create then bring in their photos. With Shutterfly Photos they now have the ability to initiate the creation of a project starting with their photos. And we are seeing customers doing that. So pleased with what we’re seeing. And Shutterfly photos overall is supporting our long term vision of simplifying product creation experience. Once we have visibility on more of your photos, we’ll do a better job in proposing projects that you can create from them using our automated product creation capabilities.
Chris, if I could just add at the same time I'll remind you Heath that we tend to have an open echo systems, so we would welfare our customers to store all of their photos on Shutterfly Photos. But I'll remind you that our customers to upload photos from a number of other photo storage sites, making the friction to create a tangible product as minimal as possible.
And our next question comes from Kerry Rice with Needham. Please go ahead.
Maybe going back to the transition of Tiny Prints under the Shutterfly brands, having a Shutterfly boutique. You’ve launched that. Does it take time once that launch is optimized the consumer paths and just get it to where you wanted to be? Or does it launch an optimal solution that you want? And then the second part of that is now that you have launched it and you have mentioned doing more promotions to keep customers engaged. What's the next milestone for Tiny Prints, understanding that you have Wedding Paper Divas to transition over in Q3? Should we look for another incremental increase in end marketing with that as you get closer to Q4? How do we think about the next milestone? Thanks.
Let me start and Mike may jump in as well. So we’re really pleased to have the launch and this is a major project for us, and I think it's -- you always breathe a sigh of relief when you see something go off without any major hitches at all. That said, I think we’re constantly looking to test and learn and improve everything we do. So that’s true Tiny Prints as well. We deliberately chose to launch the Tiny Prints boutique well before Q4 that we’d have time to test and optimize it. So really pleased with how we started, but I'm sure we’ll find some ways to improve now in Q4.
I'll add to that that it's always been part of our plan that between the launch of boutique and the Q4 peak that we would launch additional products, additional services and additional styles. So in terms of things to watch for between now and the absolute peak, you should be expecting to see some of those enhancements coming. And then of course, as I'm sure you remember, Tiny Prints is a cards and stationary brand even more Q4 centric than the Shutterfly brand. And so the real Q1 and Q3 are interesting for Tiny Prints, but it's really about Q4 and it's really about the holiday.
So I think the critical milestone for us will be how the business performs over Q4 and the extent to which we're successful in getting customers in a growth layer and love the old experience over the new experience. Everything we've seen so far is very positive, but it is early days.
I think Chris what I would just add on to that, I think, that's exactly right. But what I would add on is that we also, as we said, took the opportunity with moving Tiny Prints into peak on Shutterfly.com to reposition that brand towards the upper end of its premium range, and are pleased with the reaction we’ve got from Tiny Prints’ customers visiting the site. I think you'll see a noticeable difference that we would expect that would work to our advantage, going forward.
Yes, that’s a great point. You'll see it through the look and feel of the site. I mean a beautiful new site with a design that's very distinct from Shutterfly. I said product offering, especially in the designs of the cards that it’s very distinct from Shutterfly whereas I think even six months ago there was a lot of overlap. And this is one more example among many on the launch of the artist Limited Edition Collection where we had got three well known leading designers with exclusive collections on Tiny Prints, so all great examples of what Mike said.
And our next question comes from Victor Anthony with Aegis Capital. Please go ahead.
Quick question on the Shuttefly brand, you called out mid single digit growth, that's a deceleration from what you called out in the first quarter, which is high single digits. So I wondered if there's anything to call out there maybe promotion maybe the mobile mix. And the second part on the mobile, you called out low ASP for mobile. Maybe you could just remind us what the product mix is within mobile, as well as looks like you were implying that you’re expecting greater purchase frequency from mobile users. So is that what you're seeing now?
Victor, this is Chris, let me take the first half of that. So in terms of the Shutterfly brand, the performance has broadly been in line with our expectations. We continue to see healthy solid growth in Shutterfly. When you look at this in quarters, especially Q1 to Q3, I'd really caution you from reading too much into mid single digit or high single digit growth, that's not really indicative of the long term health of the business. We’ve got to look at the full year, including Q4 to understand that. Within the Shutterfly business, I’d call out is an area that we're continuing to see particularly strong growth is the personalized gifts and home décor categories. And that's really right in line with our strategy of offering customers a broader range of products.
Just to remind you what we've said in the past about that strategy, which continues to be the case is that we’ll be adding products in the near term and the long term to existing categories and that largely takes place in the personalized gifts and home décor categories. And from 2018 and beyond, we expect not only launch more products in existing categories but expand into new categories as well. So it's a vindication of that approach of broadening the range of products that we sell to customers that personalized gifts and home décor continues to perform so well. I should just add one more thing on that, which I don't think we mentioned in our prepared remarks. Even within the quarter, we were continuing to add a number of new products to personalized gifts and home décor categories. And Mike, do you want to pick up the question on mobile?
Yes, I mean I think just reiterating what I've said before, which is that it does tend to be a lower ASP on mobile. And with regards to the frequency of purchase, I think we'll see it have more data on that after we've gone through a full cycle of Q4 of this year after we've had our fully real what we'll have on Shutterfly for more than a year.
Yes, we draw this at one thing to that you asked about the product mix on mobile. So that's not something we've broken out in the past. What I can say is that, I think, the team has done a really good job of rapidly extending the range of products available on mobile. So while it's still a subset of the total products available to our customers on the desktop, just in Q2 alone, we launched photo books on the android app for the first time, previously that was just on iOS. We launched a whole range of products and new designs ranging from, well, I won't read it again, I've read them out in the prepared remarks, as well as adding some new features. So you should expect us to continue adding new products to mobile each quarter. And as we do so we're consistently seeing customers engage within purchase the product and now available to them through the app.
So just a follow-up on technology and development expenses, the decline. Is that just tied to the headcount reductions or is there anything that you've pulled back on within that line item?
I think it's driven by a couple of things, one of the things that we've been conscious of over the last year at Shutterfly is both where we locate our technology resources. So we have moved more of our resources to our facility in. We've also moved more of our resources offshore and we do get some benefit from the reduction in headcount related to our restructuring.
And our next question comes from Mark Mahaney with RBC Capital Markets. Please go ahead.
This is Jim Shaughnessy stepping in for Mark. Thanks for taking my question. Most might have been asked, but maybe I'd ask a quick one on the Tiny Prints migration. Is there a plan in place or what are your expectations to move the ability to purchase Tiny Prints’ products in the mobile app itself, maybe just a quick update on that, that'll be great? Thanks.
So one, it's a good news with the platform consolidation with respect to mobile for Tiny Prints. The first thing is that as of now with the creation of the Tiny Prints boutique on Shutterfly.com. Tiny Prints customers automatically are getting an optimized mobile Web experience, which is still a very significant way our customers interact with us on mobile. So whereas on the Tiny Prints’ separate Web site, we really would struggle to fund the resources to deliver an optimized mobile Web experience, that comes almost for free with the Shutterfly platform. So that mobile web experience is live now for Tiny Prints’ customers to benefit from it.
We haven't said whether we would add Tiny Prints to the mobile app or indeed create a separate Tiny Prints mobile app. Nor we’re making announcements about that today. But we have did in the past and I'll reiterate is that being on a single platform means that should we decide to do so, it'll be significantly easier for us to do so than it would have been in the past.
And this concludes our question-and-answer session for today. I would like to turn the conference back over to Chris North for any closing remarks.
Great, thanks a lot. Well, thanks for all your questions. When I step back and look at this quarter, there is a lot we’re pleased with. It was solid quarter overall in terms of the results we were pretty much smack on the midpoint of our range on revenue and touching the high end of our guidance on adjusted EBITDA. As you’ve heard, our restructuring is on track to deliver the projected cost savings. And then when you look at the Tiny Prints’ boutique launch, we’ve now delivered our most important milestone in the platform migration initiative, which I think sets us up really well for the rest of the year. Then we made good progress across all of our areas of strategic focus. Today on the call, we really focused on our mobile growth and innovation, as well as on the enhancement of our manufacturing platform through the HP deal. And in addition, we’ve reiterated our guidance for the full year. So thanks very much for your time today.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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