Shutterstock Q3 2026 Earnings: Revenue Falls 33% as Both Segments Contract

Shutterstock (NYSE: SSTK) reported Q3 2026 revenue of $173.9 million, down 33% from $260.1 million a year earlier, while diluted EPS swung to a loss of $5.35 from earnings of $0.37. For the quarter ended September 30, both product offerings contracted, a $203.3 million non-cash goodwill impairment drove a large GAAP loss, and operating cash flow declined sharply, although adjusted EBITDA remained positive.

Core Financial Results

Revenue declined by $86.2 million year over year, with weakness in both Content and Data, Distribution, and Services. Shutterstock recorded a $203.3 million goodwill impairment after the dividend suspension announced on July 22 triggered an impairment review; the charge was approximately $195.6 million after tax.

The impairment dominated GAAP results, but non-GAAP performance also weakened as lower revenue outweighed expense reductions. Adjusted net income fell 54%, while adjusted EBITDA declined 47% and its margin narrowed by 6.5 percentage points.

Gross profit and gross margin are calculated from reported revenue and cost of revenue. Adjusted net income, adjusted EBITDA, and adjusted free cash flow are non-GAAP measures.

Business and Segment Performance

Both product offerings recorded double-digit declines, but Data, Distribution, and Services accounted for most of the year-over-year revenue reduction despite representing only 9% of current-quarter revenue.

Content

Management attributed the Content decline primarily to weakness in new-customer acquisition. The segment’s constant-currency decline was 18%, close to its reported 19% contraction.

The operating metrics were consistent with that pressure. Subscribers fell approximately 16% to 890,000, subscriber revenue declined about 11% to $95.1 million, and paid downloads dropped approximately 19% to 90.9 million. Last-twelve-month average revenue per customer increased about 4% to $289, but this did not offset the lower subscriber count and subscriber revenue.

Data, Distribution, and Services

Revenue fell by $49.8 million to $15.8 million, a 76% decline on both reported and constant-currency bases. Shutterstock said revenue recognition in its data offering can vary between quarters depending on when licensed metadata assets are delivered, and management described the quarter as affected by Data Licensing deal-timing volatility.

Cost Cuts Could Not Keep Pace with Revenue and Gross Profit Declines

Cost of revenue decreased by approximately $18.8 million, or 18%, substantially less than the 33% revenue decline. As a result, gross profit fell by about $67.4 million and the calculated gross margin contracted from approximately 60.6% to 51.9%.

Sales and marketing, product development, and general and administrative expenses together declined by approximately $39.1 million, or 31%. Those savings were meaningful but remained well below the $86.2 million reduction in revenue. This gap explains why adjusted EBITDA declined and its margin narrowed even after excluding the goodwill impairment and other specified adjustments.

The goodwill charge therefore explains most of the GAAP loss, but not the underlying deterioration. Adjusted EBITDA excluded that non-cash charge and still fell 47% year over year.

Cash Flow and Balance Sheet

The non-cash impairment helps explain why Shutterstock generated $18.3 million of operating cash despite reporting a $197.8 million net loss. Nevertheless, operating cash flow was down from $78.4 million a year earlier. The company identified $5.0 million of contributor royalty payments, an $8.6 million reduction in deferred revenue, and $4.3 million of payments related to the proposed merger as cash-flow drags during the quarter.

Adjusted free cash flow remained positive at $12.5 million after $9.8 million of capital expenditures and $0.3 million of content acquisitions, but it was well below the prior-year figure. Cash and equivalents decreased by $22.7 million from June 30 to $110.5 million at quarter-end, reflecting $29.8 million of financing outflows and $9.8 million of investing outflows, partly offset by operating cash generation. Financing activity primarily consisted of a $30.0 million revolving-credit-facility repayment.

Current and long-term debt totaled approximately $242.5 million at September 30, compared with cash of $110.5 million.

Management Commentary and Leadership Changes

Management said Shutterstock remained on track to deliver the $60 million in annualized run-rate operating expense reductions announced with its second-quarter results. Headcount had been reduced by 16% year to date as the company emphasized operating discipline and cost management.

Management also described AI as changing how creative content is produced and consumed, and said Shutterstock intends to build on its content library, data capabilities, and creative-industry relationships. The release did not attach quantitative revenue or profit targets to those initiatives.

The company also announced that Rik Powell would leave the CFO role immediately and depart Shutterstock on November 13, 2026. Scott Grossman, previously Senior Vice President and Global Head of Finance, became interim CFO. Hichame Assi is serving as President and COO with responsibility for increasing the focus on operating performance and execution.

Recent Insider Transactions

Only one record in the supplied recent insider dataset included a specific transaction action and value; entries without an action, quantity, or amount are excluded. The reported transaction was a derivative-security exercise or conversion rather than a disclosed open-market purchase or sale.

The dataset’s six-month summary showed zero reported purchase transactions and zero sale transactions, with insiders holding a combined 11.51 million shares. The transaction data alone does not establish insiders’ outlook for the company.

Risks Investors Should Watch

• Content demand and customer acquisition: Content generated 91% of quarterly revenue, yet its revenue fell 19% amid weak new-customer acquisition. Subscriber count, subscriber revenue, and paid downloads also declined.
• Data Licensing timing volatility: Data, Distribution, and Services revenue dropped 76%. Dependence on the timing of metadata-asset deliveries can produce substantial quarterly fluctuations.
• Margin and cash-flow pressure: Cost reductions did not match the revenue decline, while adjusted EBITDA margin narrowed and adjusted free cash flow fell 83%.
• Restructuring and leadership execution: Shutterstock is pursuing a $60 million run-rate cost-reduction target after reducing headcount by 16% year to date, while simultaneously managing an immediate CFO transition.

Summary

Shutterstock’s Q3 2026 results were defined by broad revenue contraction, with weaker customer acquisition pressuring Content and delivery timing weighing on Data Licensing. The goodwill impairment drove the large GAAP loss, but lower adjusted earnings, narrower margins, and reduced cash generation show that the weakness extended beyond the accounting charge. The main items to monitor are subscriber and download trends, Data Licensing delivery timing, cash conversion, and execution of the planned cost reductions under the updated leadership team.