Shutterstock

Shutterstock Investor Report August 2023

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01 Shutterstock At A Glance
Shutterstock Intro Video
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02 The Creatives
Expanding Total Addressable Market
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03 Go To Market
eCommerce Channel
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04 Financial Performance
Shutterstock By The Numbers
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05 Appendix
Financial Statements and Non-GAAP Information
- See all charts used in this presentation
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Shutterstock is the end-to-end creative partner that empowers customers to tell the best versions of their stories. Our teams capture the moments, develop the tools, deliver the services, and provide the ingredients needed to simplify and supercharge creative storytelling.

Vast Library of Creative Content
- Images
- Video
- Music & SFX
- 3D Models
- Editorial
Worry-Free Licensing
- Royalty-free
- Cleared for commercial use
- Asset assurance
Creative Software & Services
- Workflow tools
- Production services
- Data & insights
At the Forefront of AI
- Generative AI content
- Data training sets for AI models

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"As a serial entrepreneur and small business owner, finding quality content for my marketing needs was a limiting factor. There was no place to buy images in an easy and cost-effective way. There were a couple of stock agencies at the time, but they weren’t designed for the Internet. They were still quoted in print runs and it was just really old school stuff. I realized that legally cleared global royalty-free photos were really hard to find. By starting Shutterstock in 2003, I was solving my own problem as a business owner."

Jon Oringer Founder & Executive Chairman

I. Shutterstock began as a two-sided marketplace that matched content creators with customers. The company benefited from the flywheel effect from the very beginning. Today, that flywheel powers our Content Engine, which now features images, videos, music, sound effects, 3D models, Editorial and generative AI content.
II. Our Creative Engine provides our customers with the workflow tools for their creative needs. Our Creative Engine also helps our Enterprise customers meet their custom content production needs through our Studios offering.
III. Whether it’s licensing the metadata associated with our content, incorporating technology such as generative AI into our offering, or offering predictive insights based on performance data, we believe there is an exciting opportunity to further leverage our Data Engine.

Investment Highlights

Expanding TAM with multiple industry tailwinds
Evolving to a creative platform leveraging content, workflow applications and data
Global scale & operating leverage
Large subscription revenue stream
Diversified across eCommerce and Enterprise sales channels
Shareholder returns driven by revenue growth, margin expansion, capital return and M&A

Our Content Engine has Consistently Expanded into Faster Growing TAM's

Size Growth
Digital Advertising, Social Media, Websites

Image

$4.3B 6% CAGR
- Size $4.3B
- Growth 6% CAGR
Music Streaming, Audio for the Metaverse, Digital Video Advertising, Podcasting

Music

$1.3B 7% CAGR
- Size $1.3B
- Growth 7% CAGR
Digital Video Advertising, Streaming Video on Demand, Film & TV

Video

$0.7B 7%+ CAGR
- Size $0.7B
- Growth 7%+ CAGR
Metaverse, Augmented Reality & Virtual Reality, Gaming

3D Models

$1.3B 10%+ CAGR
- Size $1.3B
- Growth 10%+ CAGR
Creator Economy, Democratization of Creative Design Software

Creative Software Tools

$8.2B+ 10%+ CAGR
- Size $8.2B+
- Growth 10%+ CAGR

Source: Industry research and management estimates. Stock Images, Music and Video 2022 Market Size and Market Growth Estimates based on 2022 Technavio reports. 3D 2022 Market Size Estimates based on Proficient Market Insights “Global 3D Models Industry Research Report 2023.” Creative Software Tools 2022 Market Size Estimates based on “Statista Creative Software - Worldwide Market Forecast” report.

Our Target Customers

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Use Cases for Stock Content

Utilization of stock content extends across a diverse set of media types, as follows:

Social media advertising
Digital advertising
Website design
Blogs
Logo design
Making presentations
Mobile apps
App/User interface design
Digital page layout
Mock-ups
Marketing materials: Brochures, Print, Email
Digital drawing and illustration
Video animations
Audio/Music production
Creating merchandise
Publications
GIFs, Memes, Stickers

Growing our Subscription Business

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Global Marketplace Network Effect

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Global Marketplace Network Effect

Shutterstock has over 2.7 million contributors who provide images, videos, music and 3D content to our library.
Our contributor website and mobile application operate in 21 languages and contributors can register and upload content directly within the mobile application.
All submitted content is reviewed by AI technology and human experts to ensure the highest quality, integrity and licensability.
Growing collection of over 734 million images and over 50 million video clips.

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eCommerce Channel

Self-service sales channel

Represents approximately 60% of Shutterstock’s business
>30 million monthly unique visitors over LTM period

Target customers including marketers, creative professionals and casual creatives
Use cases range from digital marketing and website creation to film & TV and metaverse applications
Continuous innovation drives differentiation

Leading-edge AI-driven search capabilities, predictive insights and workflow applications
Variety of plans for royalty free content licensing, including flexible multi-asset subscriptions
Enhanced licenses available, permitting more expansive use cases and greater legal indemnification limits
Emphasis on localization and personalization

Enterprise Channel

- Shutterstock’s global salesforce delivers strategic content solutions on a custom basis to Enterprise customers
- Enterprise customers include global advertising agency holding companies, smaller agencies, large corporations, SMBs and media & entertainment companies
- Strategic solutions include:

Extending our Customer Relationships with Studios

Offering Additional Creative Ingredients with Editorial

Ecosystem of API Partners

Embedding our content, technology, and tools within 3rd party applications, such as ad builders, social media platforms, Digital Asset Managers, and other Marketing Technologies

API Ecosystem

Streamlining access to Shutterstock within the platforms customers use every day.
Helping platform partners create more engaging customer experiences, leading to increased revenue, retention, and time on our platform.
Making it as easy as possible to find the right content, in the right place, at the right time.
Driving value beyond content through products like our Editor and Smart content recommendations.

Unique First Party Data Powering Generative AI, Computer Vision, Predictive Performance and Content Insights

Proprietary Data Products include:

Generative AI capabilities that will allow Shutterstock’s customers to generate unique images based on keyword inputs
Shutterstock’s Computer Vision technology trains and supports customers’ AI models, by leveraging the underlying metadata of our existing content library
Predictive performance technology uses AI to analyze the strengths and weaknesses of individual content assets for a customers’ marketing objective or target audience
Global trends around content preferences pertaining to consumer intent and culture (Creative Trends 2022)

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Note: Graphic shows actual activity from April 22nd, 2021 at 11:26 AM.

Generative AI

Shutterstock is Powering, Developing, and Commercializing the Future of AI, enabling Creativity at the Speed of Your Imagination.

How to use Shutterstock’s AI image generator

1
Imagine anything! Then type it into the search bar. Click Generate.
2
Shutterstock.AI generates a few versions for you to choose from.
3
Edit the image in Create, if you like. Or just license and download.

Futuristic city with retro style flying cars in the sky
professional jewelry photoshoot, floral decor
Portrait of a mongolian woman, high detail
Ceramic kitchen cups and plates and bowls
illustration of a child in a hot hair balloon

Commercially Cleared Images Derived from Properly Licensed Content

Training data is ethically sourced from Shutterstock contributors
Generative AI Images are cleared for commercial use
Contributors are compensated through Shutterstock’s Contributor Fund

Computer Vision

Shutterstock’s Computer Vision Offering Trains AI Models with our Vast Content Library

Marquee partnerships with leading technology platforms
Large multi-year contracts, with profitability in-line with overall business
Commitment to compensate our contributors through newly established Contributor Fund

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PEOPLE. PLATFORM. PROCESS.

NEW OPPORTUNITIES

Our rigorous metadata collection process results in actionable, new term use cases for partners

IT ALL BEGINS WITH A SINGLE PIECE OF CONTENT

For each piece of content, Shutterstock collects over
185 pieces of metadata across a variety of themes & categories

Predictive Performance

Recent Strategic Acquisitions

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Pond5 - acquisition of largest video-first content marketplace

Shutterstock acquired Pond5 on May 11, 2022
- World’s largest online marketplace for royalty-free video
- Further scales Shutterstock’s video business and expands Shutterstock’s editorial offering with unique and high-quality exclusive video content
- Complementary customer base with powerful relationships with the world’s largest media outlets, social media platforms, and OTT streaming companies

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Splash News - infusion of technology, customers and photographer network to Shutterstock Editorial’s Newsroom

Shutterstock acquired Splash News on May 28, 2022
- Splash is a leading entertainment news agency specializing in the procurement and distribution of celebrity and entertainment content
- Large contributor network of more than 4,000 photographers
- Extensive archive of over 27 million images
- Diverse and attractive customer base including E! News, People, Daily Mail, TMZ, Dow Jones, Reach and News UK
- Provides immediate scale and workflow enhancements to Shutterstock Editorial’s Newsroom business.

PicMonkey

Shutterstock acquired PicMonkey on September 3, 2021
- Complements Shutterstock's content subscriptions with professional-grade, easy-to-use design tools
- Key features of the PicMonkey tool includes photo editing, effects, touch-up tools, brand kits, cloud storage video, animations, and multi-page for creators, solopreneurs, social marketers, marketing professionals, pro designers and casual creatives
- Expands Shutterstock's audience reach and addressable market by extending into the large and growing market opportunity for creative software and design tools
- Recurring SaaS-based subscription revenue

With the acquisitions of Pattern89, Datasine and Shotzr, Shutterstock.AI will continue to rapidly develop its own predictive performance capabilities to help creatives and customers accomplish their goals by making more data-informed content decisions.

Pattern89

Pattern89 provides industry-level and custom insights for predictive performance at scale. Utilizing these insights allows marketers, agencies and creatives to make the right decisions -- down to colors, copy and even emojis -- without having to live A/B test. Pattern89's sophisticated workflow allows real time monitoring of campaign performance, as well as one-click optimization

Datasine

Datasine's AI provides the insights and acumen for campaign decision-making. Their team of data scientists and psychologists have created algorithms that analyze the creative elements of an ad better than humans. The company's artificial intelligence reviews past campaign performance of digital assets and provides recommendations for optimizing their performance.

Shotzr

Shotzr uses human responsiveness to imagery, applying insights to any image for predictive analysis to ensure customers select the right image for social media and digital campaigns that will resonate with audiences.

TurboSquid - democratizing 3D content worldwide

Shutterstock acquired TurboSquid on February 1, 2021
- Industry leader, with full suite of 3D content offerings, including:
  - TurboSquid - over one million assets in 3D marketplace
  - PixelSquid - content marketplace for 3D objects available via a 2D spinner
  - Kraken - SaaS-based digital asset management solution
- Extensive network of contributors who develop and sell 3D models
- Blue chip customer base including over half of the Fortune 100
- Diverse use cases spanning advertising & marketing, ecommerce, AR/VR, architecture, education, engineering, gaming and media
- Compelling strategic fit and meaningful revenue synergies with Shutterstock
- Expected to be immediately accretive to adjusted net income per diluted share and adjusted EBITDA

Management Team

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Jon Oringer Founder and Executive Chairman
Paul Hennessy Chief Executive Officer
Jarrod Yahes Chief Financial Officer
John Caine Chief Product and Digital Officer
Aimee Egan Global Head of Enterprise
Sejal Amin Chief Technology Officer
Rachel Mahoney Chief Marketing Officer
Sara Birmingham Chief Human Resources Officer
John Lapham General Counsel and Corporate Secretary
Alex Chung CEO - Giphy
Steven Ciardiello Chief Accounting Officer
Candice Murray VP, Editorial
Aiden Darne VP, Shutterstock Studios
Yvonne Januschka VP, APAC Sales

Jon Oringer Founder and Executive Chairman
Paul Hennessy Chief Executive Officer
Jarrod Yahes Chief Financial Officer
John Caine Chief Product and Digital Officer
Aimee Egan Global Head of Enterprise
Sejal Amin Chief Technology Officer
Rachel Mahoney Chief Marketing Officer
Sara Birmingham Chief Human Resources Officer
John Lapham General Counsel and Corporate Secretary

Alex Chung CEO - Giphy
Steven Ciardiello Chief Accounting Officer
Candice Murray VP, Editorial
Aiden Darne VP, Shutterstock Studios
Yvonne Januschka VP, APAC Sales

Financial Performance

Shutterstock By The Numbers

28.9% Adj. EBITDA Margin (LTM)
$374 Revenue per Customer (LTM)
556,000 Total Subscribers
42% Subscriber Revenue as a % of Total (LTM)
2.2M+ Customers
734M+ Images
50M+ Video Clips
4M+ Music Tracks & SFX
1.2M+ 3D Models
2.7M+ Contributors

Note: Key Metrics as of June 30, 2023, unless otherwise noted.

Powerful Financial Model

- 1 Strong financial foundation
- Growing base of subscription revenue
- Enterprise channel firing on all cylinders
- Actionable path to restoring growth in Ecommerce channel
- 2 Multiple levers to drive margin expansion
- Operating leverage in G&A
- Stable unit economics in Content and Creative Engines
- Higher EBITDA margins in Data Engine
- 3 Balanced framework for capital allocation
- Deployment of cash flow for dividends and buybacks
- Consistent reinvestment into business through R&D and capex
- Disciplined approach to programmatic M&A
- 4 Creative and Data Engines gaining scale
- Content Engine fed with new content types
- Creative Engine innovating with generative AI
- Data Engine gaining momentum