Shutterstock, Inc.

Shutterstock reported Q3 revenue of $250.6 million, up 7.4% year over year. Content revenue was $204 million, up 14% year over year, and Envato contributed $37.6 million of that total after the July 22 close. Data, Distribution and Services revenue was $47 million. Adjusted EBITDA was a record $70 million with a 27.9% margin. Free cash flow was $45.7 million. The company raised full-year revenue guidance to $935 million-$940 million, implying 7% to 7.5% growth, raised adjusted EBITDA guidance to $247 million-$250 million, and increased adjusted net income per diluted share guidance to $4.22-$4.31. For Q4, management expects adjusted EBITDA margin in the range of 24% to 25%.

Paul Hennessy framed the quarter as better than expected and emphasized that Shutterstock is seeing progress across multiple growth engines. He highlighted improving Content trends from pricing, packaging, and promotion changes, plus what he called strong product-market fit at Envato and increasing traction for AI-generated content through Generative Plus. He was also upbeat on Giphy, saying engagement is rising and monetization is becoming clearer, and on Data, Distribution and Services as emerging businesses with 20%+ growth potential.

Jarrod Yahes emphasized that revenue and profit both beat expectations, with record Q3 revenue of $250.6 million and record adjusted EBITDA of $70 million. He pointed to improving cost discipline as sales and marketing fell to 20% of revenue from 22.6% a year ago and product development fell to 6.1% from 7.5%, while G&A rose to 13% of revenue due in part to $3.2 million of Envato transaction costs in the quarter and $8.2 million year to date. He also noted strong free cash flow of $45.7 million, $21 million of share repurchases in the quarter, a cash balance of $131 million, and net debt of $149 million, or 0.6x LTM EBITDA; he said the company does not plan to pay down debt and will instead keep using cash for buybacks, dividends, and strategic acquisitions.

Analysts focused on the pace of the core Content recovery, the visibility of Data growth, Envato’s standalone momentum, and whether the TikTok partnership changed Giphy monetization assumptions. Management said Content ex-Envato improved from negative 10% to negative 9% to negative 7% and expects Q4 to be better, but would not say exactly when it turns positive. On Data, they said visibility is limited because the business is lumpy, but existing customers are expanding through refreshed data, new formats, and renewal activity, which should improve durability over time. On Giphy and TikTok, management did not disclose revenue specifics, but said the new agreement should make the experience more seamless and support monetization as engagement grows.