10-Q: Shutterstock Reports Q2 2026 Results: Net Loss, Goodwill Impairment

Shutterstock, Inc. reported a significant net loss of $155.9 million for the second quarter of 2026, primarily driven by a $173.7 million goodwill impairment charge, alongside a 17% year-over-year revenue decline.

Summary

• Shutterstock reported a net loss of $155.9 million for the three months ended June 30, 2026, a significant downturn from a net income of $29.4 million in the same period last year.
• The company recorded a substantial goodwill impairment charge of $173.7 million due to the termination of the merger agreement with Getty Images.
• Total revenue for the quarter decreased by 17% to $221.8 million, compared to $267.0 million in the prior year period.
• Content revenue declined by 17% to $165.7 million, and Data, Distribution, and Services revenue decreased by 16% to $56.1 million.
• Operating expenses increased significantly to $377.0 million from $232.3 million, largely due to the goodwill impairment.
• As of June 30, 2026, cash and cash equivalents stood at $133.2 million.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to a significant net loss, a substantial goodwill impairment charge, and a notable decrease in revenue compared to the prior year period.

Positives

• The company maintained a strong cash position with $133.2 million in cash and cash equivalents as of June 30, 2026.
• Interest expense decreased slightly to $3.8 million from $4.2 million in the prior year quarter.
• The company was in compliance with its debt covenants as of June 30, 2026.
• The company has $30.2 million of remaining authorization for share repurchases under its 2023 Share Repurchase Program.

Negatives

• A net loss of $155.9 million was reported for the three months ended June 30, 2026, compared to a net income of $29.4 million in the prior year.
• A significant goodwill impairment charge of $173.7 million was recorded.
• Total revenue decreased by 17% to $221.8 million for the quarter.
• Content revenue decreased by 17% to $165.7 million.
• Data, Distribution, and Services revenue decreased by 16% to $56.1 million.
• Operating expenses surged by 62% to $377.0 million, primarily due to the goodwill impairment.
• Basic and diluted net loss per share was $4.25 for the quarter, compared to earnings per share of $0.84 and $0.82 respectively in the prior year.

Risks

• The termination of the merger agreement with Getty Images triggered a goodwill impairment test, indicating potential overvaluation of past acquisitions or a significant change in market conditions.
• Weakness in new customer acquisition is cited as a primary driver for the decline in Content revenue.
• The decline in the data offering revenue within Data, Distribution, and Services could indicate increased competition or reduced demand for AI training data.
• The company's reliance on discretionary customer spending for content licenses makes it vulnerable to economic downturns and shifts in customer budgeting.
• The company's effective tax rate was significantly impacted by non-deductible goodwill impairment, highlighting the tax implications of such charges.
• The company faces ongoing risks related to attracting and retaining customers and contributors, technological innovation, competition, and pricing pressures.

Future Outlook

The filing does not provide specific forward-looking guidance. However, management's discussion indicates expectations for continued fluctuations in cost of revenue in line with revenue changes, and ongoing investment in product development. The company plans to finance operations and corporate actions through cash generated from operations and its credit facility.

Management Comments

• Stockholders Actions were voluntarily discontinued on July 6, 2026.
• Shutterstock believes it has substantial defenses in connection with the Matters and no supplemental disclosure was required under applicable law.
• In order to avoid the risk that the Matters may delay or otherwise adversely affect the implementation of the Merger, to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Shutterstock determined to voluntarily supplement the Proxy Statement.
• Nothing in said Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth therein or in the Proxy Statement.
• To the contrary, Shutterstock denies all allegations in the Matters that any additional disclosure was or is required.

Industry Context

StockSavvy.ai notes that Shutterstock's performance is impacted by broader trends in digital content licensing, the increasing demand for AI training data, and the competitive landscape for creative assets. The significant revenue decline and goodwill impairment suggest challenges in adapting to these evolving market dynamics and integrating past acquisitions effectively.

Comparison to Industry Standards

• The filing does not provide direct comparisons to industry benchmarks or specific competitor results.
• However, the reported revenue decline of 17% for the quarter and 15% for the six-month period is a significant underperformance compared to general market growth trends in digital content and AI-related data services, assuming competitors are not experiencing similar widespread declines.
• The goodwill impairment charge of $173.7 million is a substantial event, indicating that the company may have overpaid for acquisitions or that the acquired assets have significantly diminished in value, a situation that would be viewed negatively against industry peers who have managed their acquisition valuations more prudently.

Legal Proceedings

• Two stockholder complaints (Johnson v. Shutterstock and Weiss v. Shutterstock) were filed alleging false and misleading information in the Merger proxy statement; these were voluntarily discontinued on July 6, 2026.
• Demand letters were sent by purported stockholders of Shutterstock and Getty Images alleging similar disclosure deficiencies.
• The FTC filed a civil complaint alleging violations of Section 5 of the FTC Act and ROSCA regarding disclosure, subscription enrollment, and cancellation practices.
• The Company reached an agreement in principle to settle the FTC matter and paid $35 million in June 2026, recording $33 million in legal settlement expenses in the first half of 2026.

Stakeholder Impact

• Shareholders are negatively impacted by the significant net loss, substantial goodwill impairment, and revenue decline, which will likely affect share price performance.
• Contributors may see reduced royalty payments due to lower content revenue.
• Customers may experience changes in service offerings or pricing as the company navigates its financial situation and strategic adjustments.
• Creditors are likely monitoring the company's financial health closely, although the company remains compliant with its debt covenants and has a revolving credit facility.

Next Steps

• Continue to monitor and manage expenses in line with revenue performance.
• Invest in developing new products and internal tools, and enhance existing products and technologies.
• Optimize sales channels and invest in new customer acquisition, products, and geographies.
• Manage cash flow and liquidity through operations and the existing credit facility.
• Future dividend declarations are subject to Board of Directors' determination based on financial condition and prospects.

Key Dates

Recommendation

The significant net loss, substantial goodwill impairment charge, and declining revenue indicate a deteriorating financial performance and a challenging operating environment. The termination of the Getty Images merger also introduces uncertainty. While the company maintains a healthy cash balance, the negative trends and lack of clear positive catalysts suggest a sell recommendation.

Keywords

Shutterstock, Form 10-Q, Quarterly Report, Goodwill Impairment, Revenue Decline, Net Loss, Getty Images Merger Termination, Content Licensing