Shutterstock, Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This summary covers Shutterstock, Inc.'s (SSTK) unaudited financial results for the quarterly period ended June 30, 2026. The Company operates a global creative platform licensing images, footage, music, and 3D models, alongside data and distribution services (including Giphy). The reporting period was significantly impacted by the termination of the proposed merger with Getty Images, announced on June 30, 2026.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Revenue | $221.8M | $267.0M | $421.0M | $509.6M |
| Net Income (Loss) | ($155.9M) | $29.4M | ($203.5M) | $48.1M |
| Diluted EPS | ($4.25) | $0.82 | ($5.63) | $1.35 |
| Operating Cash Flow (YTD) | $18.0M | $52.1M | ||
| Adjusted EBITDA (YTD) | $107.8M | $145.6M | ||
| Cash & Equivalents | $133.2M | |||
| Total Debt | $273.3M |
Note: Debt consists of $158.1M current and $115.2M long-term. Remaining revolver capacity is $94M.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 17% year-over-year (Q2) and 17% (YTD). Content revenue fell 17% (Q2) and 15% (YTD), driven by weakness in new customer acquisition. Data, Distribution, and Services revenue declined 16% (Q2) and 28% (YTD), primarily due to a drop in data offering sales.
- Goodwill Impairment: The Company recorded a non-cash goodwill impairment charge of $173.7 million in Q2 2026. This was triggered by the termination of the Getty Images merger, which reduced the estimated fair value of the reporting unit below its carrying amount.
- Legal Settlement: The Company settled an FTC investigation regarding subscription practices, recording a $33 million legal settlement expense in the first half of 2026 (paid $35M cash).
- Operating Expenses: Total operating expenses increased 62% in Q2 and 31% YTD, largely due to the goodwill impairment and legal settlement. Excluding these items, operating expenses generally decreased due to cost optimization.
- Investment Losses: Unrealized losses on the Company's investment in Meitu, Inc. contributed to a net loss in "Other (expense) / income," totaling $18.3M for the six months ended June 30, 2026.
Guidance, Outlook, and Risks
- Merger Termination: The definitive merger agreement with Getty Images was terminated on July 7, 2026. This event triggered the goodwill impairment and represents a significant strategic shift.
- Outlook: Management expects cost of revenue and sales/marketing expenses to fluctuate with revenue. The Company continues to invest in product development and AI capabilities.
- Risks: Key risks include the impact of the merger termination on market perception, continued weakness in new customer acquisition, foreign currency fluctuations (29% of revenue is foreign-denominated), and potential future impairments if stock price or performance declines further.
- Capital Allocation: The Company paid $26.0M in dividends YTD. No share repurchases were made in the first half of 2026, though $30.2M of authorization remains under the 2023 program.
Investor Verification Checklist
- Goodwill Impairment Methodology: Verify the assumptions used in the fair value calculation (market cap + 10% control premium) following the merger termination.
- Customer Acquisition Trends: Assess the sustainability of the decline in new customer acquisition and its impact on future revenue growth.
- FTC Settlement Terms: Review the specific operational changes required by the FTC settlement to ensure compliance and estimate ongoing costs.
- Meitu Investment Valuation: Monitor the fair value of the Meitu investment, which is subject to a sale restriction until March 2027 and has shown significant volatility.
- Liquidity Position: Confirm the ability to service debt and maintain operations given the reduced operating cash flow ($18M YTD vs $52M prior year).