Shutterstock: Enterprise Growth Is Gone

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The Prospector


  • Shutterstock reported an OK Q3, but revenue growth in its enterprise segment continues to struggle.
  • Enterprise was once a source of torrid revenue growth.
  • CEO John Oringer couldn't explain why rival Adobe Stock saw recent 30% revenue growth vs. Shutterstock's 5% revenue growth.
  • The company continued to add to its cash pile.
  • Despite the cash pile, Shutterstock has growth problems that may continue.


Revenue growth concerns for Shutterstock (NYSE:SSTK) leveled off in Q3-19. Overall revenue growth was up 5%, but enterprise sales - once a source of strong growth for the company - were flat.

Rival Adobe (ADBE), which launched its competing stock photo business, Adobe Stock, in 2015, saw its revenue grow 30% recently. Shutterstock's CEO couldn't explain why Adobe's revenue growth was higher than Shutterstock's, maintaining that Shutterstock still has a competitive advantage in the market.

The company is maintaining full-year revenue growth guidance of 3-7 percent, which is dramatically lower than what the company expected when the year began. Though the company is sitting on a sizable cash pile, this is one of the lone bright spots, and it appears Shutterstock may be losing share to Adobe. Shutterstock does not look like a promising investment.


Q3-19: Revenue Growth Levels Off, But Costs Rise

Revenue growth in Q3 was 5%. The company's e-commerce segment - sales to individuals - was up 8%. But the enterprise segment - sales to business - saw flat revenue growth.

The enterprise sales drop-off continues to be a problem. The company is ramping up sales efforts to reverse the shifting tide in enterprise. One of the bright spots in recent years was Shutterstock's enterprise business. A year ago, enterprise sales growth was through the roof. Enterprise sales growth had consistently hit quarterly growth rates in 2017 and 2018 that exceeded 30%. But those torrid enterprise growth rates are gone.

Between 2011 and 2015, Shutterstock, overall, had an impressive revenue growth rate that fluctuated between 36% and 45%. Growth began to rapidly decelerate in 2015 and had leveled off to a 12% growth rate in 2017 and 2018. When 2019 began, the company had expected full-year revenue growth of at least 10%. But the company guided that number down dramatically last quarter to 3-7% last

This article was written by

The Prospector profile picture
Long-term focus, with some exceptions. Self-taught investor. I started investing my own money in 2010 and have outperformed the S&P 500 in the years since.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long ADBE.

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