Shutterstock, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2020 Shutterstock, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode, and after the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I'd now like to hand the conference over to Chris Hsu, Vice President, Investor Relations and Corporate Development. Please go ahead, sir.

Thank you, James. And good morning, everyone. Thank you for joining us today for Shutterstock's third quarter 2020 earnings call. Joining me today is Stan Pawlowski, our Chief Executive Officer, and Jared Yates, our Chief Financial Officer. Please note that some of the information you hear during our discussion today will consist of forward-looking statements, including without limitations, impacted COVID-19 on our business, the long-term effects of investments in our business, the future success and financial impact of new and existing product offerings, our future growth, margins, and profitability, our long-term strategy, and our performance targets. Actual results or trends could differ materially from our forecast. For more information, please refer to today's press release and the reports we file with the SEC from time to time, including the risk factors discussed in our most recently filed 10-Q and and our annual 10-K for discussions of important risk factors that could cause results to differ materially from any forward-looking statements we may make on our call. We'll be discussing certain non-GAAP financial measures today, including adjusted EBITDA and adjusted EBITDA margin, adjusted net income, revenue growth, including by distribution channel on a constant currency basis, billings, and free cash flow. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the financial tables included with today's press release and in our 10Q, which are posted on the investor relations section of our website. Finally, please refer to the brief information that we posted on our website that contains supporting materials for today's call. And now at this time, I'll turn the call over to Stan.

Thanks, Chris. Good morning, everyone, and thank you for joining Shutterstock's third quarter earnings call. This quarter, Shutterstock returned to year-on-year revenue growth. with revenue of $165 million, representing growth of 4 percent from Q3 of last year, or 3 percent on a constant currency basis. We saw year-on-year revenue growth across all regions, especially in North America, which was up 6 percent, which represented roughly half of the total growth. Europe and rest of the world were each up 3 percent. Revenue growth across these regions, particularly in North America, was driven by our smaller subscription products. To continue to grow revenue, we are very focused on innovating on our product offering. For example, in response to the success of our smaller image subscriptions, we rolled out smaller footage subscriptions with allotments as low as five licenses per month for $99 per month. Through our low-cost subscription model, we've made our professional quality video content accessible to a broader audience, including prosumers and the DIY marketer audience. To help this audience ease into working with video content and to expedite the editing process, we include with the subscription a set of free clips that are pre-edited by our in-house creatives so users can save time on editing and focus on their storytelling. In addition, in October, we launched our first monthly premium music sub also with an allotment of five licenses for $64.95 per month. On an annualized basis, we believe that these new subscription products will be accretive to our average revenue per customer. The product innovation we are driving is leading to strong results against the subscription KPIs we introduced last quarter and is attracting a whole new audience for Shutterstock. While our subscription metrics were exceptionally strong this quarter and we're pleased with the results, we do not believe the space of growth will continue each and every quarter. Jared will go into more detail on our KPI metrics in a few minutes. Now turning our attention from product innovation to overall strategy, we continue to make progress against Shutterstock's three strategic focus areas that I've outlined previously. Workflow innovation, fresh and relevant content, and data and insights to drive performance. Today, I'd like to spend some time particularly on workflow innovation in the enterprise channel. On the workflow innovation front in the third quarter, we began to establish the groundwork for a broader vision of driving inspiration and customer value. In the third quarter, we started to work with a number of beta customers to test and refine our enterprise customer experience. Our new enterprise experience introduces self-serve capabilities including bulk actions, such as licensing and downloads, and improved access to multi-asset workflows and discoverability. We also completed the beta launch of our collaborative workspaces application. Workspaces, which is a core piece of our strategy to drive higher content utility, will allow us to improve customers' creative workflow process by enabling on-platform collaborative discovery and ideation across teams from small and medium businesses to enterprise. In addition to innovating with workflow in the enterprise, we recently brought to market two exciting new products with the launch of editorial video and Shutterstock Studios. At launch, editorial video will have more than 250,000 user-generated live and archival video clips across news, entertainment, sports, and fashion, which is highly complementary to our editorial image catalog containing over 50 million images. Shutterstock Studios enables us to go beyond stock content to provide custom project services to address unique customer needs. Now moving on from our strategic initiatives to discussing progress against our margin objectives, EBITDA in the Q3 was 47 million, which represents a 29% adjusted EBITDA margin up from 14% last year and up from 23% in Q2. Our strong EBITDA margins reflect our efforts at improving the efficiency of our content, technology, and marketing efforts. We are, however, going to continue to invest for growth and do anticipate some margin compression over the next several quarters while we make requisite investments in our business. More specifically, as we look towards the rest of 2020 and 2021, we have a number of areas in which we plan to invest for growth. We continue to invest aggressively to drive growth in our platform solutions offering, which includes headcount expansion in both sales and technology. We continue to see platform solutions as a highly attractive area to redeploy capital given, as laid out last quarter, the opportunity to expand to new market segments and new customers, secure higher usage and engagement, and drive higher customer and revenue retention. We also continue to invest in people, not just in expanding the platform solutions team, but also in sales, marketing, product, and technology. I was also thrilled to announce earlier in the month that Sarah Birmingham joined Shutterstock as Chief Human Resources Officer. She brings a wealth of experience in building and optimizing high-performing organizations in a fast-changing environment. Before turning the call over to Jared to discuss our financial, I wanted to thank the Shutterstock team for our impressive performance this quarter. And now I'll turn the call over to Jared.