Shutterstock Inc
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
SSTK$2.97-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-26.
0001549346-24-000007
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001549346-25-000011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 197 current paragraphs.
90 unchanged; 57 reworded; 44 added; 38 removed; 4 previous and 6 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Merger Agreement with Getty Images
Current report
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:
Current report
(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); and
Current report
(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).
Current report
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:
Current report
The Merger is subject to the satisfaction of customary closing conditions, further described below, 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. The closing of the Merger is subject to the satisfaction or waiver of certain closing conditions, including:
Current report
•adoption of the Merger Agreement by Shutterstock stockholders (the “Shutterstock Stockholder Approval”) and the Getty Images Stockholder Approval, which condition was subsequently satisfied by the Getty Images Stockholder Written Consent,
Current report
•Getty Images’ registration statement on Form S-4 to be filed in connection with the Merger having become effective and the mailing of an information statement to Getty Images stockholders at least 20 business days prior to the closing,
Current report
•absence of any order, injunction or other order or law in certain jurisdictions prohibiting the Merger or making the closing of the Merger illegal,
Current report
•expiration of the applicable waiting period (and extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other regulatory approvals deemed necessary or advisable,
Current report
•shares of Getty Images Common Stock to be issued in connection with the Merger having been approved for listing on the NYSE,
Current report
•accuracy of each party’s representations and warranties, subject to certain standards set forth in the Merger Agreement,
Current report
•performance and compliance in all material respects of each party’s agreements and covenants under the Merger Agreement,
Current report
•absence of any Getty Images material adverse effect or Shutterstock material adverse effect, as applicable and subject to the definition thereof in the Merger Agreement,
Current report
•delivery of an opinion of tax counsel that the Second Merger and the Third Merger as defined in the Merger Agreement, taken together, will qualify as a “reorganization” within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended, and
Current report
•Getty Images having amended or otherwise refinanced its existing term loans and senior notes to extend the maturity of each to no earlier than February 19, 2028 (the “Existing Debt Modifications”).
Current report
Overview and Other Recent Developments
Current report
In 2024, we completed the acquisitions of Backgrid and Envato. The Company believes that Backgrid expands Shutterstock Editorial’s Newsroom offerings of editorial images, and Envato enhances digital creative assets and templates.
Current report
2 Envato Subscribers and Subscriber Revenue are presented as if Envato was acquired as of the beginning of the period presented, and represent metrics incremental to amounts presented under the “Shutterstock, Inc.” heading. Envato Average revenue per customer is derived from Envato historical results over the last twelve months.
Current report
3 The Pro Forma key operating metrics are derived from (i) the Shutterstock amounts before combining with Envato and (ii) the historical Envato metrics, as discussed in footnote 2 above.
Current report
We also report revenue net of return and chargeback allowances. These allowances are based off historical trends when available.
Current report
Interest Expense. Interest expense consists of interest on our debt and amortization of deferred financing fees.
Current report
Revenue increased by $60.7 million, or 7%, to $935.3 million in 2024 as compared to 2023. Foreign currency fluctuations did not have a significant impact on our revenue in the year ended December 31, 2024.
Current report
Our Content revenues increased by 3%, to $760.0 million in 2024, as compared to 2023. Foreign currency fluctuations did not have a significant impact on our Content license revenues in 2024. The increase in our Content license revenues was driven by revenue from Envato, which was acquired on July 22, 2024.
Current report
Sales and Marketing. Sales and marketing expenses increased by $8.0 million, or 4%, to $222.7 million in 2024 as compared to 2023. As a percent of revenue, sales and marketing expenses decreased to 24% for the year ended December 31, 2024, from 25% for the same period in 2023.This increase was driven by increases in employee-related costs, occupancy expenses, and other administrative expenses, partially offset by a decline in performance marketing spend and consulting expenses. In addition, there were $4.3 million and $0.6 million increases from recurring and non-recurring Giphy Retention
Current report
General and Administrative. General and administrative expenses increased by $16.5 million, or 12%, to $159.1 million in 2024 as compared to 2023. The increase was driven by an increase in professional fees associated with the acquisitions of Envato and Backgrid, consisting of $7.6 million of transaction costs, and increases in employee-related costs and software licenses driven by the acquisition of Envato. This was partially offset by a decrease in bad debt expense. In addition, there was a $0.1 million decrease and a $2.6 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.
Current report
Interest Expense. In the twelve months ended December 31, 2024 and December 31, 2023, we recognized interest expense of $10.6 million and $1.9 million, respectively related to our credit facility and the amortization of deferred financing fees. Interest expense for the twelve months ended December 31, 2024 increased due to borrowings under the A&R Credit Agreement entered into during the quarter ended September 30, 2024 to fund the acquisition of Envato.
Current report
The 2024 effective tax rate differs from the U.S. federal statutory tax rate primarily due to non-deductible equity compensation and a one-time charge for the foreign rate differential on acquired intangible assets, partially offset by the effect of the U.S. Research and Development (“R&D”) tax credit and the foreign-derived intangible income deduction.
Current report
Interest Expense. In the twelve months ended December 31, 2023 and 2022, we recognized interest expense of $1.9 million and $1.3 million, respectively related to our credit facility and the amortization of deferred financing fees.
Current report
Credit Facility and A&R Credit Agreement
Current report
On July 22, 2024, we entered into an amended and restated credit agreement (the “A&R Credit Agreement”), which was entered into among us, as borrower, certain direct and indirect subsidiaries of our as guarantors, the lenders party thereto, and Bank of America, N.A., as Administrative Agent for the lenders. The A&R Credit Agreement provides for a five-year (i) senior unsecured term loan facility (the “Term Loan”) in an aggregate principal amount $125 million and (ii) senior unsecured revolving credit facility (the “Revolver”) in an aggregate principal amount of $250 million. The A&R Credit Agreement provides for a letter of credit subfacility and a swingline facility.
Current report
The A&R Credit Agreement replaces our existing Credit Facility, which was fully repaid and terminated upon the effectiveness of the A&R Credit Agreement. In connection with the closing of the Credit Facility, we repaid $30 million of existing outstanding borrowings and accrued interest.
Current report
Our outstanding debt (in thousands) is reflected in the table below. We classify the Revolver as a current liability since we could draw upon and repay the outstanding amount as needed. The maturity of the Revolver is in 2029.
Current report
Our debt consists of the following (in thousands):
Current report
Based on Level 2 inputs, the carrying value of our debt approximates its fair value, as borrowings are subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements.
Current report
For the year ended December 31, 2024, we recognized interest expense of $10.6 million. As of December 31, 2024, unamortized debt issuance cost related to the Term Loan - A&R Credit Agreement is $0.7 million.
Current report
December 31, 2024, operating cash flows included $63.3 million of cash outflows made for liabilities assumed which were triggered upon the closing of the Envato acquisition (‘the Envato Seller Obligations”). The acquired cash from Envato included $63.4 million to fund the Envato Seller Obligations.
Current report
Cash used in investing activities for the year ended December 31, 2024 was $166.2 million, consisting primarily of (i) $179.1 million cash used in the acquisitions of Envato and Backgrid, net of cash acquired; (ii) capital expenditures of $47.2 million for internal-use software and website development costs and purchases of software and equipment; and (iii) $4.0 million paid to acquire the rights to distribute certain digital content into perpetuity. These cash outflows were partially offset by $64.0 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.
Current report
Cash provided by financing activities during 2024 was $150.1 million, consisting of (i) $280.0 million received from our A&R Credit Agreement; (ii) $31.6 million used for the repayment of our Credit Facility and A&R Credit Agreement; (iii) $42.4 million, related to the payment of the quarterly cash dividend; (vi) $41.6 million paid in connection with the repurchase of common stock under our 2023 Share Repurchase Program; (v) $12.2 million paid in the settlement of tax withholding obligations related to employee stock-based compensation awards; and (vi) $2.2 million paid for debt issuance costs.
Current report
(2)For the twelve months ended December 31, 2024, the tax effect of non-cash equity-based compensation includes a $6.2 million add-back for the reduction of deferred tax assets associated with the expiration of performance-based stock options and restricted stock units granted the Company’s Founder and Executive Chairman in 2014. The performance-based metrics were not met, the awards were not exercisable, and the Company recognized a non-cash tax expense for the change in deferred taxes.
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (38)
Previous report
Overview and Recent Developments
Previous report
Signature capabilities include:
Previous report
•Magic Brush - Magically modify an image by brushing over the areas you'd like to change and simply describing what you want to add, replace or erase.
Previous report
•Variations - Generate alternate options of any stock or AI-generated image.
Previous report
•Expand Image - Broaden 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.
Previous report
•Smart Resize - Automatically change the shape of your image to match the dimensions you need.
Previous report
•Background Remover - Remove or replace the background with any scene when the subject of an image is perfect, but the background is not.
Previous report
•AI Image Generator - Allows anyone to create high-quality, ethically-sourced visuals in seconds (ready for licensing and indemnifiable for commercial use) by simply describing what they are looking for.
Previous report
Revenue per Download
Previous report
We define revenue per download as the amount of revenue recognized in a given period divided by the number of paid downloads in that period excluding revenue from our Studios business, revenue that is not derived from or associated with content licenses and revenue associated with our data offering. This metric captures any changes in our pricing, including changes resulting from the impact of competitive pressures, as well as the mix of licensing options that our customers choose, some of which generate more revenue per download than others, and the impact that changes in foreign currency rates have on our pricing. Changes in revenue per download are primarily driven by the introduction of new product offerings, changes in product and sales channel mix and customer utilization of our products.
Previous report
Content in our Collection
Previous report
We define content in our collection as the total number of approved images (photographs, vectors and illustrations) and footage (in number of clips) in our library at the end of the period. We exclude content from this collection metric that is not uploaded directly to our site but is available for license by our customers through an application program interface, content from our Studios business and AI generated content. Prior to December 31, 2022, this metric only included approved images and footage clips in our library on shutterstock.com at the end of the period. We believe that our large selection of high-quality content enables us to attract and retain customers and drives our network effect.
Previous report
2023 revenue from our E-commerce customers decreased by 12%, to $439.9 million in 2023, as compared to 2022. E-commerce revenues were not impacted on a constant currency basis in 2023. The decline in our E-commerce revenues was driven by weakness in new customer acquisition, partially offset by revenues generated from our acquisition of Pond5, which contributed to revenues for the full year in 2023.
Previous report
2023 revenues from our Enterprise customers increased by 33%, to $434.6 million in 2023, as compared to 2022. Enterprise revenues were not impacted on a constant currency basis in 2023. The increase in Enterprise revenues was primarily driven by growth in our data offering, revenue generated from our acquisitions of Pond5 and Splash News, which contributed to revenues for the full year in 2023 and revenue generated from Giphy.
Previous report
In the years ended December 31, 2023 and 2022, we delivered 153.0 million and 173.3 million paid downloads, respectively, and our revenue per download was $4.72 in 2023 compared to $4.40 in 2022. During 2023, the decline in paid downloads is attributed to the decline in the E-commerce business.
Previous report
Revenue increased by $54.4 million, or 7%, to $827.8 million in 2022 as compared to 2021. On a constant currency basis, revenue increased approximately 11% in the year ended December 31, 2022, as compared to 2021. Approximately 18% and 7% of the Company’s revenues were denominated in Euro and Pounds Sterling, respectively. These currencies have depreciated to historically low values compared to the U.S. dollar during the twelve months ended December 31, 2022. Other currencies we transact in, including the Japanese Yen and Australian Dollar also depreciated significantly during the period.
Previous report
Content license revenues increased by 4%, to $789.3 million in 2022 as compared to 2021. On a constant currency basis, Content revenues increased by 8% in 2022, as compared to 2021. During 2022, growth in our Content offering was driven by revenue generated from our acquisitions of PicMonkey and Pond5. Content revenue also benefited from higher subscriber revenue, which was offset by a reduction in revenue generated from our transactional products.
Previous report
2022 revenue from our E-commerce customers increased by 2%, to $501.4 million in 2022 as compared to 2021. On a constant currency basis, E-commerce revenues increased by 5% in 2022, as compared to 2021. During 2022, growth in our E-commerce sales channel was driven by revenue generated from our acquisitions of PicMonkey and Pond5. E-commerce revenue also benefited from higher subscriber revenue, which was offset by a reduction in revenue generated from our transactional products.
Previous report
2022 revenues from our Enterprise customers increased by 15%, to $326.4 million in 2022 as compared to 2021. On a constant currency basis, Enterprise revenues increased by 20% in 2022, as compared to 2021 . The increase in Enterprise revenues was primarily driven by growth in our data offering, in addition to revenue generated from our acquisitions of Pond5 and Splash News. Enterprise revenue growth also benefited from continued momentum in Shutterstock Studios and Shutterstock Editorial.
Previous report
In the years ended December 31, 2022 and 2021, we delivered 173.3 million and 180.0 million paid downloads, respectively, and our revenue per download was $4.40 in 2022, as compared to $4.16 in 2021. During 2022, the 6% increase in revenue per download is primarily due to changes in product mix coupled with a reduction in paid download volumes.
Previous report
Sales and Marketing. Sales and marketing expenses decreased by $1.7 million, or 1%, to $203.2 million in 2022 as compared to 2021. As a percent of revenue, sales and marketing expenses decreased to 25% for the year ended December 31, 2022, from 26% for 2021. The decrease in sales and marketing expenses was primarily driven by $15.7 million in lower marketing spend, partially offset by $5.2 million in higher employee-related costs and $2.6 million in higher non-cash compensation expense. In addition, the Company has incurred additional marketing expenses associated with second quarter live events and festivals. We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.
Previous report
General and Administrative. General and administrative expenses increased by $1.9 million, or 1%, to $132.6 million in 2022 as compared to 2021. This increase was primarily driven by (i) $4.3 million in professional fees related to our acquisitions of Pond5 and Splash News, (ii) $3.6 million increase in bad debt expense; (iii) $1.8 million related to realized foreign currency losses, (iv) $1.6 million in severance costs associated with a strategic workforce optimization initiative; and (v) $1 million related to a donation to provide direct assistance to Shutterstock’s contributors in Ukraine. These increases were partially offset by (i) $6.9 million in lower non-cash compensation expense related to the departure of certain executives and expense associated with certain performance based awards, (ii) $1.9 million in lower depreciation and amortization expense and (iii) $1.2 million in lower employee-related costs.
Previous report
During 2021, other expense, net substantially consisted of $3.3 million of expense due to foreign currency fluctuations.
Previous report
In October 2015, our board of directors approved a share repurchase program, authorizing us to repurchase up to $100 million of our common stock and in February 2017, our Board of Directors approved an increase to the share repurchase program (collectively, the “2015 and 2017 Share Repurchase Programs”), authorizing us to repurchase up to an additional $100 million of our outstanding common stock. As of December 31, 2022, we have fully utilized our authorization for repurchases under the 2015 and 2017 Share Repurchase Programs.
Previous report
Revolving Credit Facility
Previous report
Cash used in investing activities for the year ended December 31, 2021 was $250.4 million, consisting primarily of (i) $181.6 million cash used in the acquisitions of Turbosquid and PicMonkey, net of cash acquired; (ii) $31.6 million cash used in the asset acquisitions of Pattern89, Inc., Datasine Limited and assets from Shotzr, Inc.; (iii) capital expenditures of $28.1 million for internal-use software and website development costs, and purchase of software and equipment, and (iv) $8.9 million to acquire the rights to distribute certain digital content in perpetuity.
Previous report
Cash used in financing activities during 2021 primarily consisted of (i) $30.7 million related to the payment of the quarterly cash dividend; (ii) $26.5 million in connection with the repurchase of common stock under our share repurchase program, and (iii) $22.7 million, paid in settlement of tax withholding obligations related to employee stock-based compensation awards. These amounts were partially offset by $2.1 million in proceeds received in connection with the exercise of stock options.
Previous report
(1)Included in other adjustments, net includes unrealized foreign currency transaction gains and losses, severance associated with strategic workforce optimizations and interest income and expense.
Previous report
Adjusted Net Income
Previous report
Free Cash Flow
Previous report
Accounts Receivable and Allowance for Doubtful Accounts
Previous report
Our accounts receivable consists of customer obligations due under normal trade terms, carried at their fair value less an allowance for doubtful accounts, if required. We determine our allowance for doubtful accounts based on an evaluation of (i) the aging of our accounts receivable considering historical receivables loss rates, (ii) on a customer-by-customer basis, where appropriate, and (iii) the economic environments in which we operate.
Previous report
As of December 31, 2023 and 2022, we had an allowance for doubtful accounts of $6.3 million and $5.8 million, respectively. Fluctuations in our allowance for doubtful accounts are primarily attributable to changes in the aging profile of our gross accounts receivable balances and specific customer situations arising during the year.
Previous report
Income Taxes
Previous report
Our income tax expense includes U.S. (federal and state) and foreign income taxes. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.
Previous report
We account for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. We record an income tax liability for the difference, if any, between the benefit recognized and measured and the tax position taken or expected to be taken on our tax returns. To the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The reserves are adjusted in light of changing facts and circumstances, such as the outcomes of tax audits or lapses in statutes of limitations. Any reserve for uncertain tax provisions and related penalties and interest is included in the income tax provision.
Previous report
On a quarterly basis, we assess the realizability of deferred tax assets, based on the available evidence including a history of taxable income, estimates of future taxable income and planning strategies and a valuation allowance is recorded to the extent that it is not more likely than not that the deferred tax assets will be realized. Significant management judgment is required in determining the provision for income taxes and deferred tax assets and liabilities. In the event that actual results differ from these estimates, we will adjust these estimates in future periods which may result in a change in the effective tax rate in a future period.
Previous report
The GILTI provisions of the TCJA impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. We have elected to treat any potential GILTI inclusions as a period cost.
Reworded paragraphs (57)
Previous wording
Our platform brings together users and contributors of content by providing readily-searchable content that our customers pay to license and by compensating contributors as their content is licensed. 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.
Current wording
Our platform brings together users and contributors of content by providing readily-searchable content that our customers pay to license and by compensating contributors as their content is licensed. Contributors upload their content to our web properties in exchange for royalty payments based on customer download activity. Beyond content, customers also leverage our platform to assist with the entire creative process from ideation through creative execution.
Previous wording
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.
Current wording
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 our business and are supported by our searchable creative platform and driven by our large contributor network.
Previous wording
Our Content is distributed to customers under the following brands: Shutterstock; Pond5; TurboSquid; PicMonkey; PremiumBeat; Splash News; Bigstock; and Offset.
Current wording
Our Content is distributed to customers under the following brands: Shutterstock; Pond5; TurboSquid; PicMonkey; PremiumBeat; Splash News; Bigstock; Envato; and Offset.
Previous wording
Over 2.0 million active, paying customers contributed to our revenue in 2023. Our contributors made their images, footage and music tracks available in our collection, which has grown to 771 million images and 54 million footage clips as of December 31, 2023. This makes our collection of content one of the largest of its kind, and we delivered 153.0 million paid downloads to our customers across all of our brands during the year ended December 31, 2023.
Current wording
Over 4.0 million active, paying customers contributed to our revenue in 2024. Our contributors made their images, footage and music tracks available in our collection, which has grown to 800 million images and 59 million footage clips as of December 31, 2024. This makes our collection of content one of the largest of its kind, and we delivered 134.3 million paid downloads to our customers across all of our brands during the year ended December 31, 2024.
Previous wording
Subscribers, subscriber revenue and average revenue per customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from TurboSquid beginning February 2022, from PicMonkey beginning September 2022, and from Pond5 and Splash News beginning May 2023. These metrics exclude the respective counts and revenues from Giphy.
Current wording
Subscribers, subscriber revenue and average revenue per customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, and for Average Revenue per Customer, from Giphy beginning July 2024. These metrics exclude the respective counts and revenues from Backgrid and Envato.
Previous wording
1 Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from TurboSquid beginning February 2022, from PicMonkey beginning September 2022, and from Pond5 and Splash News beginning May 2023. These metrics exclude the respective counts and revenues from our acquisition of Giphy.
Current wording
1 Represents Shutterstock, Inc. key operating metrics before combining the Envato related metrics. Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, and for Average Revenue per Customer, from Giphy beginning July 2024. These metrics exclude the respective counts and revenues from our acquisitions of Backgrid and Envato.
Previous wording
A significant portion of our revenues are earned from licensing content. Content licenses are generally purchased on a monthly or annual subscription basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download. We also generate revenue from tools made available through our platform.
Current wording
A significant portion of our revenues are earned from licensing content. Content licenses are generally purchased on a monthly or annual basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download. We also generate revenue from tools made available through our platform.
Previous wording
We recognize revenue upon the satisfaction of performance obligations. For content licenses, we recognize revenue on both our subscription-based and transaction-based products when content is downloaded by a customer, at which time the license is provided. In addition, management estimates expected unused licenses for subscription-based products and recognizes the estimated revenue associated with the unused licenses as digital content is downloaded and licenses are obtained for such content by the customer during the subscription period. The estimate of unused licenses is based on historical download activity and future changes in the estimate could impact the timing of revenue recognition of our subscription products. For revenue associated with tools available through our platform, the Company recognizes revenue on a straight-line basis over the subscription period. We expense contract acquisition costs as incurred, to the extent that the amortization period would otherwise be one year or less.
Current wording
We recognize revenue upon the satisfaction of performance obligations. We recognize revenue on both our subscription-based and transaction-based products when content is downloaded by a customer, at which time the license is provided. In addition, for subscription-based products in which the customer obtains an allotted number of digital assets to download, we estimate expected unused licenses and recognize the revenue associated with the unused licenses as digital assets are downloaded and licenses are obtained for such content by the customer during the subscription period. The estimate of unused licenses is based on historical download activity and future changes in the estimate could impact the timing of revenue recognition of our subscription products. For unlimited download subscription-based products, we recognize revenue in a manner that reflects estimated content download patterns during the subscription period. The estimate of content download patterns is based on historical download activities from the unlimited download products. Revenue associated with tools available through our platform is recognized on a straight-line basis over the subscription period. We expense contract acquisition costs as incurred, to the extent that the amortization period would otherwise be one year or less.
Previous wording
Collectability is probable at the time the electronic order or contract is entered. A significant portion of our customers purchase products by making electronic payments with a credit card at the time of the transaction. Customer payments received in advance of revenue recognition are contract liabilities and are recorded as deferred revenue. Customers that do not pay in advance are invoiced and are required to make payments under standard credit terms. Collectability for customers who pay on credit terms allowing for payment beyond the date at which service commences, is based on a credit evaluation for certain new customers and transaction history with existing customers.
Current wording
For customers making electronic payments, collectability is probable at the time the order or contract is entered. A significant portion of our customers purchase products by making electronic payments with a credit card at the time of the transaction. Customer payments received in advance of revenue recognition are contract liabilities and are recorded as deferred revenue. Customers that do not pay in advance are invoiced and are required to make payments under standard credit terms. Collectability for customers who pay on credit terms allowing for payment beyond the date at which service commences, is based on a credit evaluation for certain new customers and transaction history with existing customers.
Previous wording
We recognize revenue gross of contributor royalties because we are the principal in the transaction as we are the party responsible for the performance obligation and control the product or service before transferring it to the customer. We also license content to customers through third-party resellers. Third-party resellers sell our products directly to customers as the principal in those transactions. Accordingly, we recognize revenue net of costs paid to resellers.
Current wording
We recognize revenue gross of contributor royalties because we are the principal in the transaction as we are the party responsible for the performance obligation and control the product or service before transferring it to the customer. We also license content to customers through third-party resellers, who are our direct customers. Third-party resellers sell our products directly to end users as the principal in those transactions. Accordingly, we recognize revenue net of costs paid to resellers.
Previous wording
Other (Expense) / Income, Net. Other (expense) / income, net consists of non-operating costs such as foreign currency transaction gains and losses, in addition to interest income and expense.
Current wording
Other Income / (Expense), Net. Other income / (expense), net consists of non-operating costs such as foreign currency transaction gains and losses, in addition to unrealized gains and losses on investments and interest income and expense.
Previous wording
Data, Distribution, and Services revenues increased by 142%, to $38.5 million in 2022 as compared to 2021. On a constant currency basis, Data, Distribution, and Services revenues increased by 144% in 2022, as compared to 2021. The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which accounted for $15.2 million of the growth from 2021 to 2022. Data, Distribution, and Services revenue growth also benefited from continued momentum in Shutterstock Studios.
Current wording
Our Data, Distribution, and Services revenues increased by 28%, to $175.3 million in 2024, as compared to 2023. Foreign currency fluctuations did not have a significant impact on our Data, Distribution, and Services revenues in 2024. The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which grew 15% in the twelve months ended December 31, 2024, as well as growth in our Distribution and Services offerings.
Previous wording
Changes in our revenue by region were as follows: revenue from North America increased by $62.2 million, or 21%, to $353.2 million, revenue from Europe decreased by $10.5 million, or 4%, to $243.0 million and revenue from outside Europe and North America increased by $2.6 million, or 1%, to $231.6 million, in the year ended December 31, 2022 compared to 2021.
Current wording
Changes in our revenue by region were as follows: revenue from North America increased by $46.9 million, or 11%, to $474.7 million; revenue from Europe increased by $14.6 million, or 6%, to $245.7 million; and revenue from outside Europe and North America remained relatively flat, decreasing by $0.9 million to $214.9 million, in the year ended December 31, 2024 compared to 2023.
Previous wording
Cost of Revenue. Cost of revenue increased by $36.6 million, or 13%, to $314.3 million in 2022 as compared to 2021. As a percent of revenue, cost of revenues increased to 38% for the year ended December 31, 2022, from 36% for 2021. This increase was primarily driven by: (i) increased depreciation and amortization expense driven by our recent acquisitions; (ii) increased royalty, content and reviewer costs; and (iii) higher costs associated with website hosting, hardware and software licenses. We expect that our cost of revenue will continue to fluctuate in line with changes in revenue and paid downloads.
Current wording
Cost of Revenue. Cost of revenue increased by $43.7 million, or 12%, to $396.3 million in 2024 as compared to 2023. As a percent of revenue, cost of revenues increased to 42% for the year ended December 31, 2024, from 40% for 2023. This increase was driven by increased royalty and content costs, costs associated with website hosting, hardware and software licenses, employee related costs, and depreciation and amortization driven by the acquisition of Envato. We expect that our cost of revenue will continue to fluctuate in line with changes in revenue.
Previous wording
Product Development. Product development expenses increased by $13.4 million, or 26%, to $65.4 million in 2022 as compared to 2021. This increase was primarily driven by (i) $6.3 million in higher employee and third-party contractor related costs, net of capitalized labor for the twelve months ended December 31, 2022, (ii) $3.7 million in higher non-cash compensation expense and (iii) increased software and other IT-related costs for the twelve months ended December 31, 2022. We expect product development expenses, of which a portion will be capitalized, to continue in the foreseeable future, as we pursue opportunities to invest in developing new products and internal tools and enhance the functionality of our existing products and technologies.
Current wording
Product Development. Product development expenses decreased by $7.7 million, or 8%, to $88.4 million in 2024 as compared to 2023. The decrease in product development was driven by decreases in outside consultant expenses and employee-related costs. This was partially offset by an increase in software licenses. In addition, there was a $1.3 million increase and a $4.8 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively. We expect product development expenses, of which a portion will be capitalized, to continue in the foreseeable future, as we pursue opportunities to invest in developing new products and internal tools and enhance the functionality of our existing products and technologies.
Previous wording
Other expense, net. During 2022, other expense, net substantially consisted of $1.3 million of expense due to foreign currency fluctuations and $1.3 million of interest expense related to the Credit Facility. As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.
Current wording
Other Income, Net. During the twelve months ended December 31, 2024, other income, net substantially consisted of $4.1 million of interest income and $2.2 million of unrealized gains related to our investment in Meitu, Inc., partially offset by $1.8 million of unrealized foreign currency losses. During the twelve months ended December 31, 2023, other income, net consisted of $4.8 million of interest income and $0.9 million of unrealized foreign currency gains. As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.
Previous wording
Income Taxes. Income tax expense increased by $2.1 million, to $14.9 million in 2022 as compared to 2021. Our effective tax rates for the years ended December 31, 2022 and 2021 were approximately 16.4% and 12.3%, respectively.
Current wording
Income Taxes. Income tax expense increased by $14.4 million, to $26.6 million in 2024 as compared to 2023. Our effective tax rates for the years ended December 31, 2024 and 2023 were approximately 42.6% and 10.0%, respectively.
Previous wording
Content license revenues decreased by 7%, to $737.3 million in 2023, as compared to 2022. On a constant currency basis, Content license revenues decreased by 7% in 2023, as compared to 2022. The decline in our Content license revenues was driven by weakness in new customer acquisition, partially offset by increases in Pond5. Pond5 contributed to revenues for the full year in 2023 compared to seven months in 2022.
Current wording
Content license revenues decreased by 7%, to $737.3 million in 2023 as compared to 2022. On a constant currency basis, Content revenues decreased by 7% in 2023, as compared to 2022. The decline in our Content license revenues was driven by weakness in new customer acquisition, partially offset by increases in Pond5. Pond5 contributed to revenues for the full year in 2023 compared to seven months in 2022.
Previous wording
Data, Distribution, and Services revenues increased by 256%, to $137.3 million in 2023, as compared to 2022, and increased by 256% in 2023 on a constant currency basis. The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which accounted for $84.9 million of the growth from 2022 to 2023 and $10.5 million of revenue generated from Giphy.
Current wording
Data, Distribution, and Services revenues increased by 256%, to $137.3 million in 2023 as compared to 2022. Foreign currency fluctuations did not have a significant impact on our Data, Distribution, and Services revenues in 2023. The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which accounted for $84.9 million of the growth from 2022 to 2023 and $10.5 million of revenue generated from Giphy.
Previous wording
General and Administrative. General and administrative expenses increased by $10.0 million, or 8%, to $142.6 million in 2023 as compared to 2022. This increase was primarily driven by (i) $7.9 million in higher non-cash equity-based compensation expense and (ii) Giphy employee-related costs comprised of $1.8 million of recurring Giphy Retention Compensation, net of capitalized labor and $5.4 million of non-recurring Giphy Retention Compensation not considered necessary to operate our business. These increases are partially offset by $1.4 million in lower occupancy costs and $1.2 million in lower professional fees. For the twelve months ended December 31, 2023 and 2022, general and administrative expenses included $3.0 million and $3.9 million in transaction costs related to the Giphy and Pond5 acquisitions, respectively.
Current wording
General and Administrative. General and administrative expenses increased by $10.0 million, or 8%, to $142.6 million in 2023 as compared to 2022. This increase was primarily driven by (i) $7.9 million in lower non-cash compensation expense and (ii) Giphy employee-related costs comprised of $1.8 million of recurring Giphy Retention Compensation, net of capitalized labor and $5.4 million of non-recurring Giphy Retention Compensation not considered necessary to operate our business. These increases were partially offset by (i) $1.4 million in lower occupancy costs and $1.2 million in lower professional fees. For the years ended December 31, 2023 and 2022, general and administrative expenses included $3.0 million and $3.9 million in transaction costs related to the Giphy and Pond5 acquisitions, respectively.
Previous wording
Other income / (expense), net. During 2023, other income / (expense), net substantially consisted of $4.8 million of interest income and $0.9 million of favorable unrealized foreign currency fluctuations, partially offset by $1.9 million of interest expense related to our credit facility. As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.
Current wording
Other income / (expense), net. During 2023, other income / (expense), net substantially consisted of $4.8 million of interest income and $0.9 million of favorable unrealized foreign currency fluctuations. As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.
Previous wording
During 2022, other income / (expense), net substantially consisted of $1.3 million of expense due to foreign currency fluctuations and $1.3 million of interest expense related to the Credit Facility.
Current wording
During 2022, other income / (expense), net substantially consisted of $1.3 million of expense due to foreign currency fluctuations.
Previous wording
As of December 31, 2023, we had cash and cash equivalents totaling $100.5 million, which primarily consisted of bank balances. Since inception, we have financed our operations primarily through cash flows generated from operations. In addition, if necessary, we have the ability to draw on our credit facility, which was obtained on May 6, 2022.
Current wording
As of December 31, 2024, we had cash and cash equivalents totaling $111.3 million, which primarily consisted of bank balances. Since inception, we have financed our operations primarily through cash flows generated from operations. In addition, if necessary, we have the ability to draw on our A&R Credit Agreement dated July 22, 2024.
Previous wording
Historically, our principal uses of cash have included funding our operations, capital expenditures, content acquisitions, business combinations and asset acquisitions that enhance our strategic position, cash dividend payments and share purchases under our share repurchase program. We plan to finance our operations, capital expenditures and corporate actions largely through cash generated by our operations and our credit facility. Since our results of operations are sensitive to the level of competition we face, increased competition could adversely affect our liquidity and capital resources.
Current wording
Historically, our principal uses of cash have included funding our operations, capital expenditures, and content acquisitions. In addition, our capital allocation strategies also include funding business combinations and asset acquisitions that enhance our strategic position, cash dividend payments, principal and interest payments under our credit facilities and share purchases under our share repurchase programs. We plan to finance our operations, capital expenditures and corporate actions largely through cash generated by our operations and our credit facility. Since our results of operations are sensitive to the level of competition we face, increased competition could adversely affect our liquidity and capital resources.
Previous wording
We declared and paid cash dividends of $1.08 per share of common stock, or $38.7 million during the year ended December 31, 2023.
Current wording
We declared and paid cash dividends of $1.20 per share of common stock, or $42.4 million during the year ended December 31, 2024.
Previous wording
On January 29, 2024, our Board of Directors declared a quarterly cash dividend of $0.30 per share of outstanding common stock payable on March 14, 2024 to stockholders of record at the close of business on February 29, 2024. The Company currently expects to continue to pay comparable cash dividends on a quarterly basis in the future. Future declarations of dividends are subject to the final determination of our Board of Directors, and will depend on, among other things, our future financial condition, results of operations, capital requirements, capital expenditure requirements, contractual restrictions, anticipated cash needs, business prospects, provisions of applicable law and other factors our Board of Directors may deem relevant.
Current wording
On January 27, 2025, our Board of Directors declared a quarterly cash dividend of $0.33 per share of outstanding common stock payable on March 20, 2025 to stockholders of record at the close of business on March 6, 2025. The Company currently expects to continue to pay comparable cash dividends on a quarterly basis in the future. Future declarations of dividends are subject to the final determination of our Board of Directors, and will depend on, among other things, our future financial condition, results of operations, capital requirements, capital expenditure requirements, contractual restrictions, anticipated cash needs, business prospects, provisions of applicable law and other factors our Board of Directors may deem relevant.
Previous wording
We expect to fund future repurchases, if any, through a combination of cash on hand, cash generated by operations and future financing transactions, if appropriate. Accordingly, our share repurchase program is subject to us having available cash to fund repurchases. Under the share repurchase program, management is authorized to purchase shares of our common stock from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements, and subject to market conditions and other factors.
Current wording
We expect to fund future repurchases, if any, through a combination of cash on hand, cash generated by operations and future financing transactions, if appropriate. Accordingly, our 2023 Share Repurchase Program is subject to us having available cash to fund repurchases. Under the share repurchase program, management is authorized to purchase shares of our common stock from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements, and subject to market conditions and other factors.
Previous wording
As of December 31, 2023, we have repurchased approximately 4.4 million shares of our common stock under the share repurchase program at an average per-share cost of $51.74. During the year ended December 31, 2023, we repurchased approximately 634,500 shares of our common stock at an average per share cost of $44.45. As of December 31, 2023, we had $71.8 million of remaining authorization for purchases under the 2023 Share Repurchase Program.
Current wording
As of December 31, 2024, we have repurchased approximately 5.5 million shares of our common stock since 2015 under our repurchase programs (including our 2015 and 2017 Share Repurchase Programs and our 2023 Share Repurchase Program) at an average per-share cost of $48.86. During the year ended December 31, 2024, we repurchased approximately 1.1 million shares of our common stock at an average per share cost of $37.42. As of December 31, 2024, we had $30.2 million of remaining authorization for purchases under the 2023 Share Repurchase Program.
Previous wording
On May 6, 2022, we entered into a five-year $100 million unsecured revolving loan facility (the “Credit Facility”) with Bank of America, N.A., as Administrative Agent and other lenders. The Credit Facility includes a letter of credit sub-facility and a swingline facility and it also permits, subject to the satisfaction of certain conditions, up to $100 million of additional revolving loan commitments with the consent of the Administrative Agent.
Current wording
On May 6, 2022, we entered into a five-year $100 million unsecured revolving loan facility (the “Credit Facility”) with Bank of America, N.A., as Administrative Agent and other lenders. The Credit Facility includes a letter of credit sub-facility and a swingline facility and it also permitted, subject to the satisfaction of certain conditions, up to $100 million of additional revolving loan commitments with the consent of the Administrative Agent.
Previous wording
At our option, revolving loans accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 0.125% to 0.500%, determined based on the Company’s consolidated leverage ratio or (ii) the Term Secured Overnight Financing Rate (“SOFR”) (for interest periods of 1, 3 or 6 months) plus a margin ranging from 1.125% to 1.5%, determined based on our consolidated leverage ratio. We are also required to pay an unused commitment fee ranging from 0.150% to 0.225%, determined based on the Company’s consolidated leverage ratio. In connection with the execution of this agreement, we paid debt issuance costs of approximately $0.6 million.
Current wording
At our option, loans under the A&R Credit Agreement accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 0.375% to 0.750%, determined based on our consolidated leverage ratio or (ii) the Term Secured Overnight Financing Rate (“SOFR”) (for interest periods of 1, 3 or 6 months) plus a margin ranging from 1.375% to 1.750%, determined based on our consolidated leverage ratio, plus a credit spread of 0.100%. We are also required to pay an unused commitment fee ranging from 0.175% to 0.250%, determined based on our consolidated leverage ratio. In connection with the execution of this agreement, we paid debt issuance costs of approximately $2.2 million.
Previous wording
As of December 31, 2023 and December 31, 2022, we had $30 million and $50 million, respectively, of outstanding borrowings under the Credit Facility. As of December 31, 2023, we had a remaining borrowing capacity of $67 million, net of standby letters of credit. For the year ended December 31, 2023, the Company paid cash interest totaling $1.7 million and our annualized interest rate was 5.8%.
Current wording
As of December 31, 2024, we had a remaining borrowing capacity of $94 million, net of standby letters of credit.
Previous wording
The Credit Facility contains financial covenants and requirements restricting certain of our activities, which are usual and customary for this type of loan. We are also required to maintain compliance with a consolidated leverage ratio and a consolidated interest coverage ratio, in each case, determined in accordance with the terms of the Credit Facility. As of December 31, 2023, we are in compliance with these covenants.
Current wording
The A&R Credit Agreement contains financial covenants and requirements restricting certain of our activities, which are customary for this type of credit facility. We are also required to maintain compliance with a consolidated leverage ratio and a consolidated interest coverage ratio, in each case, determined in accordance with the terms of the A&R Credit Agreement. As of December 31, 2024, we were in compliance with these covenants.
Previous wording
As of December 31, 2023, we had approximately $82 million in unconditional cash obligations, consisting primarily of purchase obligations related to contracts for cloud-based services, infrastructure and other business services as well as minimum royalty guarantees in connection with certain content licenses, of which the majority is due to be paid within the next two years. In addition, as of December 31, 2023, we had approximately $45 million in operating lease obligations with lease payments extending through 2029.
Current wording
As of December 31, 2024, we had approximately $56 million in unconditional cash obligations, consisting primarily of purchase obligations related to contracts for cloud-based services, infrastructure and other business services as well as minimum royalty guarantees in connection with certain content licenses, of which the majority is due to be paid within the next two years. In addition, as of December 31, 2024, we had approximately $38 million in operating lease obligations with lease payments extending through 2029.
Previous wording
See Notes 15 and 16 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our lease and other non-lease commitments, respectively, as of December 31, 2023.
Current wording
See Notes 17 and 18 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding our lease and other non-lease commitments, respectively, as of December 31, 2024.
Previous wording
Our primary source of cash from operating activities is cash collections from our customers. A significant portion of our revenue is generated from credit card transactions and is typically settled within one to five business days. Our primary uses of cash for operating activities are for the payment of royalties to content contributors, employee-related expenditures and the payment of other operating expenses incurred in the ordinary course of business.
Current wording
Our primary source of cash from operating activities is cash collections from our customers. The majority of our revenue is generated from credit card transactions and is typically settled within one to five business days. Our primary uses of cash for operating activities are for the payment of royalties to content contributors, employee-related expenditures and the payment of other operating expenses incurred in the ordinary course of business.
Previous wording
Net cash provided by operating activities was $158.5 million for the year ended December 31, 2022, compared to $216.4 million for the year ended December 31, 2021. The decline in cash provided by operating activities for the year ended December 31, 2022 was impacted by the timing of payments and cash receipts in the ordinary course of business which can cause operating cash flow to fluctuate from period to period.
Current wording
Net cash provided by operating activities was $140.6 million for the year ended December 31, 2023, compared to $158.5 million for the year ended December 31, 2022. The decline in cash provided by operating activities for the year ended December 31, 2023 was impacted by the timing of payments and cash receipts in the ordinary course of business which can cause operating cash flow to fluctuate from period to period.
Previous wording
In addition, operating cash flows for the year ended December 31, 2023 were unfavorably impacted by the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows. Operating cash flows for the year ended December 31, 2022 were unfavorably impacted by several large accounts payables and accrued expense items from 2021 that were paid in 2022.
Current wording
In addition, operating cash flows for the year ended December 31, 2023 were unfavorably impacted by the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows.
Previous wording
Our investing activities have consisted primarily of capital expenditures, business combinations, asset acquisitions, investments and content acquisitions. As of 2023, investing activities also includes amounts related to the Giphy Retention Compensation. Capital expenditures include internal-use software and website development costs, purchases of software equipment, and capitalization of leasehold improvements. Capital expenditures are primarily attributable to investments in internally developed software. We continue to invest significantly in product development to enhance our customer experience and increase the efficiency with which we deploy new products and features. Cash used in investing activities totaled $54.3 million, $275.6 million and $250.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
Our investing activities have consisted primarily of capital expenditures, business combinations, asset acquisitions, investments and content acquisitions. Starting in 2023, investing activities also includes amounts related to the Giphy Retention Compensation. Capital expenditures include internal-use software and website development costs, purchases of software equipment, and capitalization of leasehold improvements. Capital expenditures are primarily attributable to investments in internally developed software. We continue to invest significantly in product development to enhance our customer experience and increase the efficiency with which we deploy new products and features. Cash used in investing activities totaled $166.2 million, $54.3 million and $275.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
Cash used in investing activities for the year ended December 31, 2023 was $54.3 million, consisting primarily of (i) $53.7 million cash used in the acquisition of Giphy, net of cash acquired; (ii) capital expenditures of $44.6 million for internal-use software and website development costs, and purchases of software and equipment, and (iii) $11.1 million paid to acquire the rights to distribute certain digital content in perpetuity. These cash outflows were partially offset by $53.7 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.
Current wording
Cash used in investing activities for the year ended December 31, 2023 was $54.3 million, consisting primarily of (i) $53.7 million cash used in the acquisition of Giphy, net of cash acquired; (ii) capital expenditures of $44.6 million for internal-use software and website development costs, and purchase of software and equipment, and (iii) $11.1 million paid to acquire the rights to distribute certain digital content in perpetuity. These cash outflows were partially offset by $53.7 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.
Previous wording
Cash used in investing activities for the year ended December 31, 2022 was $275.6 million, consisting primarily (i) $211.8 million cash used in the acquisitions of Pond5 and Splash News, net of cash acquired; (ii) capital expenditures of $43.3 million for internal-use software and website development costs, and purchase of software and equipment, and (iii) $16.8 million paid to acquire the rights to distribute certain digital content in perpetuity.
Current wording
Cash used in investing activities for the year ended December 31, 2022 was $275.6 million, consisting primarily of (i) $211.8 million cash used in the acquisitions of Pond5 and Splash News, net of cash acquired; (ii) capital expenditures of $43.3 million for internal-use software and website development costs, and purchase of software and equipment, and (iii) $16.8 million to acquire the rights to distribute certain digital content in perpetuity.
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Compensation, respectively. We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.
Current report — wording carried from elsewhere
Bargain Purchase Gain. In the twelve months ended December 31, 2023, we recognized a bargain purchase gain of $50.3 million related to the acquisition of Giphy, which represents the excess of the fair value of the net assets acquired in addition to the net negative purchase price.
Current report — wording carried from elsewhere
The 2023 effective tax rate differs from the U.S. federal statutory tax rate primarily due to the non-taxable bargain purchase gain associated with the acquisition of Giphy, the effect of the U.S. Research and Development (“R&D”) tax credit and the foreign-derived intangible income deduction.
Current report — wording carried from elsewhere
Net cash provided by operating activities was $32.6 million for the year ended December 31, 2024, compared to $140.6 million for the year ended December 31, 2023. In the twelve months ended December 31, 2024, operating cash flows included a $10.3 million increase in the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows. In addition, in the twelve months ended
Current report — wording carried from elsewhere
(iii) $22.6 million paid in settlement of tax withholding obligations related to employee stock-based compensation awards. These amounts were partially offset by approximately $50.0 million in proceeds received from our Credit Facility.
Current report — wording carried from elsewhere
Adjusted Net Income and Adjusted Net Income Per Diluted Common Share
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Impairment of Lease and Related Assets. Impairment of lease and related assets was $18.7 million in 2022. In the fourth quarter of 2022, the Company completed an analysis of leased-office usage and (i) ceased using certain of its office space, including two floors of its headquarters in New York City as well as (ii) abandoned certain other smaller office spaces. This resulted in an $18.7 million impairment charge, of which $15.9 million and $2.8 million relates to right-of-use assets and property and equipment, respectively.
Previous report — wording carried elsewhere
The 2022 effective tax rate differs from the U.S. federal statutory rate primarily due to the effect of the U.S. R&D tax credit and the foreign-derived intangible income deduction. The 2021 effective tax rate differs from the U.S. federal statutory rate primarily due to the foreign-derived intangible income deduction and the impact of a capital loss transaction.
Previous report — wording carried elsewhere
Net cash provided by operating activities was $140.6 million for the year ended December 31, 2023, compared to $158.5 million for the year ended December 31, 2022. The decline in cash provided by operating activities for the year ended
Previous report — wording carried elsewhere
December 31, 2023 was impacted by the timing of payments and cash receipts in the ordinary course of business which can cause operating cash flow to fluctuate from period to period.