What changed in this filing

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Item 1. Business

2025-02-25 compared with 2024-02-26 · 48 added, 36 removed, 286 unchanged (23% of the section changed)

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Contributors upload their content to our web properties in exchange for royalty payments based on customer download activity.

Beyond content, customers also leverage the Company’s platform to assist with the entire creative process from ideation through creative execution.

Beyond content, customers also leverage our platform to assist with the entire creative process from ideation through creative execution.

Digital content licensed to our customers for their creative needs includes images, footage, music, and 3D models (our “Content” offering).

Our Content revenues represent the majority of the Company’s business and are supported by our searchable creative platform and driven by our large contributor network.

Our Content revenues represent the majority of our business and are supported by our searchable creative platform and driven by our large contributor network.

In addition, our customers have needs that are beyond traditional content license products and services.

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Total Revenue $ 935,262 $ 874,587 $ 827,826

Merger Agreement with Getty Images

On January 6, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to combine in a merger-of-equals transaction with Getty Images Holdings, Inc.

(NYSE:GETY) (“Getty Images”) (such transaction referred to herein as the “Merger”).

Subject to terms and conditions in the Merger Agreement, the aggregate consideration to be paid by Getty Images in respect of the outstanding shares of common stock of Shutterstock will be:

(a) An amount in cash equal to the product of $9.50 multiplied by the number of shares of Shutterstock common stock outstanding immediately prior to the transaction close (including vested Shutterstock restricted stock units and performance stock units);

(b) A number of shares of Getty Images common stock equal to the product of 9.17 multiplied by the number of shares of Shutterstock common stock outstanding immediately prior to the transaction close (including vested Shutterstock restricted stock units and performance stock units).

Each holder of Shutterstock common stock immediately prior to the transaction close will have the option to receive, subject to proration, for each share of Shutterstock common stock held by such holder:

(a) Cash consideration of $9.50 and 9.17 shares of Getty Images common stock;

(b) Cash consideration of $28.8487;

The closing of the Merger is subject to the satisfaction of closing conditions, including receipt of required regulatory approvals, the approval of Getty Images and Shutterstock stockholders and the extension or refinancing of Getty Images’ existing debt obligations.

Subject to the satisfaction of the closing conditions, upon closing of the Merger, Shutterstock’s common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended.

Our Content Offering

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Shutterstock, our flagship brand, includes various content types such as image, footage, music and editorial.

Envato, which was acquired by the Company on July 22, 2024, also offers a variety of digital assets and templates.

Pond5 is a video-first content marketplace which expands the Company’s content offerings across footage, image and music.

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PremiumBeat offers exclusive high-quality music tracks and provides producers, filmmakers and marketers the ability to search handpicked production music from the world’s leading composers.

Splash News provides editorial image and video content across celebrity

and red carpet events.

Splash News and Backgrid, which was acquired on February 1, 2024, provide editorial image and video content across celebrity and red carpet events.

Bigstock maintains a separate content library tailored for creators seeking to incorporate cost-effective imagery into their projects.

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For customers seeking specialized solutions, Shutterstock Studios extends our offerings by providing custom, high-quality content matched with production tools and services at scale, leveraging assets from all brands or creating new assets as required.

In 2023, we launched our AI image creator and Creative AI-powered editing tool which gives our customers the ability to modify and transform any image.

The Creative AI editing suite will empower our customers to leverage signature editing capabilities to unlock transformative possibilities in content creation and ideation.

Signature capabilities include:

• Magic Brush - modifies an image by brushing over the areas customers would like to change and simply describing what customers want to add, replace or erase.

• Variations - generates alternate options of any stock or AI-generated image.

• Expand Image - broadens the view of any image, as easily as if zooming out through a camera lens, to see more of the scene behind the central image.

• Smart Resize - automatically changes the shape of an image to match the dimensions needed.

• Background Remover - removes or replaces the background with any scene when the subject of an image is perfect, but the background is not.

Our Data, Distribution, and Services Offering

Our Data, Distribution, and Services offering address customer demand for products and services that are beyond our Content licenses.

Our Data, Distribution, and Services offering addresses customer demand for products and services that are beyond our Content licenses.

These products and services include, among other things, the use of our metadata, leveraging our Giphy, Inc.

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Our metadata customer base ranges from large technology and media companies to smaller start-up organizations.

In 2023, we completed our acquisition of Giphy, Inc.

In 2023, we acquired Giphy, Inc.

Giphy is a content platform that allows users to personalize casual conversations with GIFs, and generates billions of monthly impressions through over 14,000 API partners.

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We offer a whole spectrum of services at pre-production, production, live production and post-production stages.

2024 Acquisitions

Backgrid USA, Inc.

and Backgrid London LTD

On February 1, 2024, the Company completed its acquisition of all of the outstanding shares of Backgrid USA, Inc.

and Backgrid London LTD, (collectively, “Backgrid”), for approximately $20 million, subject to customary working capital adjustments.

The total purchase price was paid with existing cash on hand.

Backgrid supplies media organizations with real-time celebrity content.

The Company believes this acquisition expands Shutterstock Editorial’s Newsroom offering of editorial images and footage across celebrity, red carpet and live-events.

Envato Pty Ltd.

On July 22, 2024, the Company completed its acquisition of Envato Pty Ltd.

(“Envato”) pursuant to a Share Purchase Agreement (the “Purchase Agreement”) entered into on May 1, 2024, to acquire all of the issued and outstanding capital stock of Envato.

The aggregate consideration paid by the Company, after customary working capital and other adjustments in accordance with the terms of the Purchase Agreement, was approximately $250 million.

The addition of Envato has:

• Complemented Shutterstock’s existing offering with Envato Elements, a leading unlimited multi-asset subscription offering,

• Expanded Shutterstock’s reach within faster growing audiences such as freelancers, hobbyists, small businesses and agencies,

• Increased Shutterstock’s Content revenue from video, audio, graphics, fonts and templates, and

• Further diversified Shutterstock into new content types including code & web themes, product mock-ups, fonts and templates (e.g.

Slides, PowerPoint, Keynote, WordPress, video, designs for social posts, gaming, podcasts and print-on-demand).

Our Marketplace

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We believe that our licensing model and creative platform drive a high volume of download activity that in turn provides a high volume of search, download and other customer behavioral data that enables us to continuously improve the quality and accuracy of our proprietary search algorithms, including keyword, search localization and similar image identification, and encourages the creation and contribution of new content to meet our customers’ needs.

We enable users to search and discover content to meet their unique needs by searching our collection and previewing our content alongside its propensity to perform

and global utilization, at no cost prior to licensing.

We enable users to search and discover content to meet their unique needs by searching our collection and previewing our content alongside its propensity to perform and global utilization, at no cost prior to licensing.

We also leverage, to the greatest extent possible, the global nature of our user interfaces and marketing efforts, including local languages, currencies and payment methods, as well as our effective use of current and emerging technology to attract and retain customers and contributors.

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Our online platform provides a freely searchable collection of content that our users can license, download and incorporate into their work.

We encourage all our customers to take advantage of our creative platform’s AI-Powered search capabilities, our credit card-based payment options and the immediate digital delivery of licensed content.

We strive to offer simple, transparent purchase options designed to cater to customers’ specific needs.

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Contributors are notified within the contributor portal when a content submission is not approved during the review process.

This notification includes an

explanation of why the image was not selected for publication.

This notification includes an explanation of why the image was not selected for publication.

We believe that this feedback is valuable to contributors and enhances the quality of future content submissions as well as our customers’ experience.

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Contributors earn royalties based on a tiered earnings rate schedule that is tied to annual licensing volume.

The earnings tier of the contributor at the time of licensing, as well as the purchase option under which the content was licensed, are used to calculate the royalty earnings for each licensing event.

The earnings tier of the contributor at the time of licensing, as well as the purchase option under which the content was licensed, are used to calculate the royalty earnings for each licensing

Contributors may choose to remove their content from our collection, subject to the terms of service that govern our contributor relationships.

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law, be defamatory or libelous, or be pornographic or obscene.

Provided that a customer has not breached the license agreement or any other agreement with us, we will defend, indemnify, and hold a customer harmless from direct damages attributable to breaches of the express

representations and warranties provided in our license agreements.

From time to time, we agree to customize our license agreements with non-standard indemnification terms.

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Our license agreements generally cap our indemnification obligations at amounts ranging from $10,000 to $250,000, with exceptions for certain products for which our indemnification obligations may be uncapped.

We maintain commercially reasonable insurance intended to protect against the costs of intellectual property litigation and our indemnification obligations under our license agreements.

We maintain commercially

reasonable insurance intended to protect against the costs of intellectual property litigation and our indemnification obligations under our license agreements.

Intellectual Property

We protect our intellectual property through a combination of patent, trademark, copyright and domain name registrations, as well as trade secret protections.

We own a portfolio of trademarks, including “Shutterstock,” “Shutterstock Editorial,” “Asset Assurance,” “Offset,” “Bigstock,” “Rex Features,” “PremiumBeat,” “TurboSquid,” “PicMonkey,” “Pattern89,” “Shotzr,” “Pond5,” “Splash News,” “Giphy,” “Shutterstock Studios,” “Shutterstock Editor,” “Shutterstock.AI,” “Creative Flow,” “Backgrid,” “Envato,” “Envato Elements,” “Photodune,” “Tuts+,” “Themeforest,” “Codecanyon,” “Audiojungle,” “Graphicriver,” “Videohive,” “3DOcean,” “Mixkit,” and “Placeit” and their associated logos.

We will pursue additional trademark registrations to the extent that we create any additional material and registrable trademarks or logos.

We are the registered owner of a variety of the shutterstock.com, bigstock.com, offset.com, premiumbeat.com, rexfeatures.com, turbosquid.com, picmonkey.com, pond5.com and splashnews.com internet domain names and various other related domain names.

We are the registered owner of a variety of the shutterstock.com, bigstock.com, offset.com, premiumbeat.com, rexfeatures.com, turbosquid.com, picmonkey.com, pond5.com, splashnews.com, backgrid.com, envato.com, placeit.net, tutsplus.com, themeforest.net, codecanyon.net, videohive.net, audiojungle.net, graphicriver.net, photodune.net, 3docean.net, and mixkit.co.

internet domain names and various other related domain names.

We have successfully recovered infringing domain names in the past and intend to continue to enforce our rights in the future.

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The CCPA and CPRA, among other things, requires companies that collect personal information about California residents to make disclosures to those residents about data collection, use and sharing practices, allows residents, amongst other rights, to opt out of certain data sharing with third parties and provides a private right of action for data breaches.

Thirteen other states have passed comprehensive data privacy laws, which are in effect today or taking effect by 2026.

Sixteen other states have passed comprehensive data privacy laws, which are in effect today or taking effect by 2026.

In addition, from a taxation perspective, there are applicable and potential government regulatory matters that may impact us.

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We encourage employee engagement through regular employee events, productive communication, our global recognition program and by creating a culture of belonging.

Our Diversity, Equity, and Inclusion (“DEI”) goal is to build a workforce, contributor network and content library that is representative and inclusive of the diverse global community we serve.

We have a long-term commitment to creating an inclusive culture, embedding DEI throughout our recruiting and retention efforts and promoting representation and inclusion throughout our platform.

Our eight employee resource groups and our DEI team have helped to raise awareness about inclusion and advocate for various historically excluded groups.

We continued our focus on building leaders' and managers' cultural competency and inclusive leadership skills, as well as building a diverse pipeline of talent by establishing relationships with diverse talent communities and achieving greater representation in our content library through our Create Fund program.

Our operating results may fluctuate from quarter to quarter as a result of a variety of factors.

Our quarterly and annual results may reflect the effects of intra-period trends in customer behavior.

For example, we expect that certain customers’ usage may decrease at times during the third quarter of each calendar year due to the summer vacation season and may increase at times during the fourth quarter of each calendar year as demand is generally higher to support marketing campaigns in advance of the fourth quarter holiday season.

While we believe seasonal trends have affected and will continue to affect our quarterly results, our growth trajectory may have overshadowed these effects to date.

Additionally, because a significant portion of our revenue is derived from repeat customers who have purchased subscription plans, our revenues have historically been less volatile than if we had no subscription-based customers.

Finally, our Data, Distribution,and Services results will fluctuate from quarter to quarter based on the satisfaction of certain agreed to milestones with our customers

In addition, expenditures on content by customers tend to be discretionary in nature, reflecting overall economic conditions, the economic prospects of specific industries, budgeting constraints, buying patterns and a variety of other factors, many of which are outside our control.

Expenditures on content by customers tend to be discretionary in nature, reflecting overall economic conditions, the economic prospects of specific industries, budgeting constraints, buying patterns and a variety of other factors, many of which are outside our control.

As a result of these and other factors, the results of any prior quarterly or annual periods should not be relied upon as indicators of our future operating performance.

Additionally, our Data, Distribution, and Services results will fluctuate from quarter to quarter based on the timing of delivery of large metadata sets in our Data business.

Corporate and Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business