Stock photography and footage provider Shutterstock (NYSE:SSTK) missed Wall Street’s revenue expectations in Q4 CY2024, but sales rose 15.2% year on year to $250.3 million. Its non-GAAP profit of $0.67 per share was 20.9% below analysts’ consensus estimates.

Is now the time to buy Shutterstock? Find out in our full research report.

Commenting on the Company's performance, Paul Hennessy, the Company's Chief Executive Officer, said, "We are proud that Shutterstock achieved record revenues and Adjusted EBITDA in 2024. Our Content business grew on a year over year basis and each component of our Data, Distribution and Services business grew double digits or greater on a year over year basis and we expect continued growth across both of these offerings in 2025."

Company Overview

Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE:SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.

Online Marketplace

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission-paying sellers, generating flywheel scale effects that feed back into further customer acquisition.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Unfortunately, Shutterstock’s 6.5% annualized revenue growth over the last three years was tepid. This wasn’t a great result compared to the rest of the consumer internet sector, but there are still things to like about Shutterstock.

This quarter, Shutterstock’s revenue grew by 15.2% year on year to $250.3 million but fell short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 13% over the next 12 months, an acceleration versus the last three years. This projection is noteworthy and suggests its newer products and services will catalyze better top-line performance.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Paid Downloads

Request Growth

As an online marketplace, Shutterstock generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.

Over the last two years, Shutterstock’s paid downloads, a key performance metric for the company, increased by 15.4% annually to 33 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

Unfortunately, Shutterstock’s paid downloads decreased by 2.4 million in Q4, a 6.8% drop since last year. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t moving the needle for requests yet.

Revenue Per Request

Average revenue per request (ARPR) is a critical metric to track for online marketplace businesses like Shutterstock because it measures how much the company earns in transaction fees from each request. ARPR also gives us unique insights into a user’s average order size and Shutterstock’s take rate, or "cut", on each order.

Shutterstock’s ARPR growth has been exceptional over the last two years, averaging 15.4%. Its ability to increase monetization while growing its paid downloads at an impressive rate reflects the strength of its platform, as its requests are spending significantly more than last year.

This quarter, Shutterstock’s ARPR clocked in at $7.59. It grew by 51.1% year on year, faster than its paid downloads.

Key Takeaways from Shutterstock’s Q4 Results

We struggled to find many positives in these results as the company missed across all key metrics. This was mainly driven by the decline in its number of paid downloads. Overall, this was a weaker quarter. The stock remained flat at $24.48 immediately after reporting.

Is Shutterstock an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.