jon oringer, founder & ceo tim bixby, cfo may 2013 · may 2013. safe harbor ... nick flynn vp...
TRANSCRIPT
![Page 1: Jon Oringer, Founder & CEO Tim Bixby, CFO May 2013 · May 2013. Safe Harbor ... Nick Flynn VP Sales Scott Braut VP Content Wyatt Jenkins VP Product Michael Lesser VP/General Counsel](https://reader034.vdocuments.net/reader034/viewer/2022052009/601e03a6dd98b73ead463662/html5/thumbnails/1.jpg)
Jon Oringer, Founder & CEOTim Bixby, CFO
May 2013
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Safe Harbor This presentation contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition.
Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of our most recent public filings. You should read our public filings, including the Risk Factors set forth therein and the documents that we have filed as exhibits to those filings, completely and with the understanding that our actual future results may be materially different from what we currently expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
In addition, as we refer to earnings, we will also refer to adjusted EBITDA, non-GAAP net income and free cash flow. We define adjusted EBITDA as earnings adjusted for interest income/(expense), income taxes, depreciation, amortization and non-cash equity-based compensation; non-GAAP net income as net income excluding the after tax impact of non-cash equity based compensation expense; and free cash flow as cash provided by (or used in) operating activities adjusted for capital expenditures and interest income/(expense). Adjusted EBITDA, non-GAAP net income free cash flow are non-GAAP financial measures. You can find a reconciliation of adjusted EBITDA, non-GAAP net income and free cash flow to the most directly comparable GAAP financial measures in our most recent quarterly earnings release, which is posted on the Investor Relations section of our website. We believe that the use of adjusted EBITDA, non-GAAP net income and free cash flow provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures such as adjusted EBITDA, non-GAAP net income and free cash flow should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
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A Global Marketplace for Imagery
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Revenue
• 25 million images
• 1 million video clips
• 750,000 paying customers
• 40,000 contributors
• 150 countries, 18 languages
• Headquartered in New York City
• 262 employees
• 20% Adjusted EBITDA margin
Company Snapshot
Key Facts
(M)
4
Q1 2013
$51
Q1 2012
$38
$170
$120
$83
$61
201120102009 2012
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Key Investment Highlights
1 Disruptive player in a large, growing market
2 Highly recurring revenues, with profitable growth
3 Scalable customer acquisition model
4 Powerful network effects
5 Multiple future growth opportunities
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Jon Oringer Founder, CEO and Chairman
Thilo Semmelbauer President and COO
Tim Bixby Chief Financial Officer
Jim Chou Chief Technology Officer
Miles Williams VP Marketing
Nick Flynn VP Sales
Scott Braut VP Content
Wyatt Jenkins VP Product
Michael Lesser VP/General Counsel
Steven Berns EVP and CFO, Revlon
Jeff Epstein Former EVP and CFO, Oracle
Thomas Evans President and CEO, Bankrate
Jeffrey Lieberman Managing Director, Insight Venture Partners
Jonathan Miller Former CEO, Digital Media Group at News Corp
Executive Team
Board of Directors
World-Class Leadership
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All Businesses Need Images
Leading Ad Agency Fortune 500 Large Publisher
Freelancer Small Business Blogger
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Challenges in Licensing Images
• $2,000 to $20,000+
• Days to weeks
• Uncertain results
• Often $200-$500+
• Time consuming
• Complex licensing
8
Web Search Commissioned Traditional Stock
• Unlicensed
• Mixed quality
• Time-consuming
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A Highly Disruptive Solution
Monthly Subscriptions $249 / month
Image Packs $49 for 5 images
Enterprise $10’s to $100’s / image
9 Reflects USD pricing. Shutterstock prices in ten currencies.
Simple
Immediate
Affordable
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• Growth in websites
• Growth in advertising
• Tablet and mobile browsing
• Commissioned � Stock
• Traditional � Marketplaces
Large and Growing Market
$4 Bn$6 Bn
Market for Commercial Imagery Key Trends
10 Source: L.E.K. Consulting LLC, August 2012
Stock
Commissioned
2016
$13
$6
2011
$11
$4
(B)
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Why Do Customers Choose Shutterstock?
11
Largest and freshest library
Content
Fast, relevant and unbiased
Search
Simple and frictionless
Value
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Powerful Network Effects
Customers Contributors
12
Data
Data
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Multiple Growth Opportunities
13
Increased Penetration in All Markets
Emerging Content Types
Large Enterprises and Ad Agencies
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Market Leading Innovation
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Instant
Offset
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Highly Loyal Customers
15 Note: Excludes inorganic growth.
2006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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Highly Loyal Customers
16 Note: Excludes inorganic growth.
2012201120102009200820072006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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Highly Loyal Customers
17 Note: Excludes inorganic growth.
Earlier Cohorts2007 Cohort
2012201120102009200820072006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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Highly Loyal Customers
18 Note: Excludes inorganic growth.
Earlier Cohorts2007 Cohort
2012201120102009200820072006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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Highly Loyal Customers
19 Note: Excludes inorganic growth.
Earlier Cohorts2007 Cohort2008 Cohort
2009 Cohort
2010 Cohort
2011 Cohort
2012 Cohort
2012201120102009200820072006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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Highly Loyal Customers
20 Note: Excludes inorganic growth.
Earlier Cohorts2007 Cohort2008 Cohort
2009 Cohort
2010 Cohort
2011 Cohort
2012 Cohort
2012201120102009200820072006
$70M
$35M
$105M
$140M
$175M
$0M
Revenue by Cohort - Each Year Builds on a Stronger Base
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4xROI
or
after 3 years
Profitable Customer Acquisition
21 Note: Only includes customers whose first purchase was in Q1 2010.
$12MGross Profit
$3MInvestment
$3M
Gross Profit
$1.5M
Marketing
$3M
$3.5M
$4M
Q1 2010
Customers Acquired in Q1 2010
Marketing spend recovered in first year
Next 3 Qtrs 2nd year 3rd year
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Growing, Predictable & Profitable Business Model
22
41% revenue CAGR (2009-2012)Increasing number of images, customers, paid downloads
Growing
~100% annual revenue retentionStrong repeat behavior across all plans
Predictable
Profitable for 23 consecutive quartersHigh degree of control over margins
Profitable
Note: Year-to-year revenue retention statistic based on average of the last five years (2008-2012)
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$1.80 $1.88 $2.05 $2.23
Growth in Key Metrics
Images in Library Active Customers
(M)
Paid Downloads
(K) (M)
23
Revenue per download
23
17
13
9
2009 201220112010
786
552
322
175
201220102009 2011
76
59
44
34
2012201120102009
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Strong and Consistent Revenue Growth
Revenue
(M)
24
$49
$42$41
$38$35
$31$29
$25$24
$21$20$19
$51
1Q’124Q’11 4Q’123Q’122Q’123Q’112Q’111Q’114Q’103Q’102Q’101Q’10 1Q’13
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Diverse Revenue Sources
All Geographies All Company Sizes No Concentration
Self Employed 2-5
6-50 51-500 500+
Top 25 Customers <3% of RevenueAmericas
EMEA
Asia/Pacific
25 Note: Charts reflect 2012 revenue except company size chart which reflects customer count by company size, via customer survey in July 2011. (n = 2,421)
12%45%
43%
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Profitable, Scalable Customer Acquisition Model
Unit Economics Sales and Marketing Spend
(M)
Acquisition Costs
~$100
Lifetime Revenue
Lifetime Contribution
Cost of Goods
~$350
26
2012
$32
2011
$45
2007 2008
$11
2009
$9
2010
$18
$7
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Key Investment Highlights
1 Disruptive player in a large, growing market
2 Highly recurring revenues, with profitable growth
3 Scalable customer acquisition model
4 Powerful network effects
5 Multiple future growth opportunities
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