Q1 2021 Shutterstock Inc Earnings Call
And then.
Good day, and thank you for standby and welcome to the Shutterstock, Inc. First quarter earnings Conference call.
And as time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
A question during this session on each branch.
Star one on your telephone.
Be advised today's conference is being recorded if you require any further assistance. Please press star zero and I would know like Jan to conference over to your Speaker today, Chris <unk>. Please go ahead.
Thank you Mary.
Good morning, everyone and thank you for joining us for Shutterstock first quarter 2021 earnings call joining.
Joining us today and stamp Lawsky, Shutterstock, Chief Executive Officer, and Jared gaze, Shutterstock Chief Financial Officer.
Please note that some of the information you'll hear during our discussion today will consist of forward looking statements, including without limitation the impact of COVID-19 on our business and the long term effects of investments and our business.
Her success and financial impact on new and existing product offerings and the integration of the company's strategic acquisitions, and our future growth margins and profitability on a 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 annual report on form 10-K for discussions of important risk factors that could cause actual results to differ materially from any forward looking statements that we may make on a call.
We'll be discussing certain non-GAAP financial measures today, including adjusted EBITDA and adjusted EBITDA margin adjusted net income adjusted net income per diluted share 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 and the financial tables included with today's press release and in our 10-K, which are posted on the Investor Relations section of our website.
Finally, please refer to the brief information deck, we posted on our website that contains supporting materials for today's call.
And now I'll turn the call over to Stan.
Thank you, Chris and good morning, everyone and thank you for joining Shutterstock Q1, 2021 earnings call.
It's hard to believe but it's been over a year from Shutterstock employees began working from home due to the pandemic.
It's been a year of challenges for many amongst us, but as I reflect on the past 12 months I draw hope and inspiration from the manner in which our employees have risen to the occasion adapted and thrived.
Strong results were about to discuss today reflect their hard work and perseverance during these times.
With that as a backdrop I want to spend some time, commenting on industry demand and the renewed growth we're experiencing.
And then I'll touch on how we are well positioned to maintain and this momentum by delivering product innovation that enhances our customers' workflow and delivering content that is relevant and fresh.
And lastly, I will discuss some steps we are taking to ensure we foster and innovative culture that reflects different backgrounds and perspectives, both within shutterstock as well as within our artists and contributor community.
Broadly speaking demand is strengthening and it is clear that we are building momentum as we work our way out of the pandemic.
Fourth quarter digital AD spend grew 29% and independent research analysts forecast broad based rebound and U S. Digital AD spend growth across all industries and 2021 following uneven growth driven by sub several laggards in 2020.
Marketers are spending on powerful content creative tools marketing technology, and seeking to create impactful AD campaigns that enhance the digital presence the businesses large and small.
There seems to be growing confidence across industries, even in areas, such as automotive entertainment media and travel industries, which were particularly hard hit last year.
This demand backdrop translated into Shutterstock revenue growing 14% and the first quarter with balanced strength across revenue channels geographies and content types.
Subscriber trends remained particularly encouraging in terms of both subscriber count which grew 46% and.
And subscriber revenue, which grew 20% driven mainly by continued strength and our smaller subscription products.
E Commerce was up 19% in Q1, 2021, driven by balanced growth across image footage and music as well as the strong performance of three D.
Even backing out the growth from the contribution of turbo squid as well as favorable foreign exchange trends and and easier Mont March comparable E. Commerce grew double digits year on year and exceeded our expectations.
We have noted on previous earnings call that our enterprise channel returned to growth earlier than expected we.
We saw that momentum continue with 5% year on year growth and the first quarter U S. Canada and EMEA led the way for enterprise growth driven by an uptick and agency and corporate spend in those regions.
Also within enterprise, there has been greater interest and multi asset and multi faceted deals that leverage integrated solutions, including our studios and editorial products.
Within enterprise our platform solutions business remains the fastest growing part of our business driven by growth and both new customers and increased volume through our integrations with existing partners.
While overall, we are seeing strong bookings growth in the quarter as evidenced by the third quarter of deferred revenue growth. We also note that bookings at an industry by industry level remain uneven with some industries, such as technology and retail performing well, while others are lagging.
As I mentioned at the top of the call we are delivering product innovations to our customers that enhance their workflows and address their dynamic business requirements for.
For example, we recently announced the launch of Shutterstock flex subscriptions targeted at small and medium sized businesses.
Blacks SMB customers get immediate access to millions of images footage and music assets and a single easy to customize plan at one simple price what.
What I find most exciting from a customer experience perspective is the simplicity.
Customers can now more easily license on larger variety of content with a single subscription which can be shared with multiple users within the organization.
We also announced last week and exciting new partners, New enterprise integration with Google Drive.
Which helps make shutterstock content widely available and easily accessible across Google suite of productivity tools for our enterprise customers.
On the content front, we continue to focus on fresh and relevant content to differentiate our product and deliver value to our customers.
For example for our editorial business, we announced exclusive rights for the distribution of life and archival content and connection with the screen actors Guild Award.
Our top notch photographers will capture images from all Sag award events and deliver content to our customers and under one minute from the time the photos taken.
As in person events return and the future Shutterstock will have access to premium locations and will provide early access to deliver highly valuable content in near real time.
Furthermore, we are now the exclusive global distribution partner for the Combi NASS collection, which features more than 30000 pieces of content from marquee brands like Vogue Vanity Fair GQ architectural diet.
Digest House and garden and glamour.
This content is now accessible via the bolt at Shutterstock, which itself contains over 50 million assets.
In terms of our newest content type three D turbo squid is performing solidly and above our expectations.
And there are tremendous untapped synergies and growth opportunities available to us as a result of this transaction and we are progressing with integrating their three D content into our offering so shutterstock customers can seamlessly purchase three D.
There are several industry tailwind that are just starting to benefit us in three D. For example, turbo squid has benefited from the continued growth and visual effects production and such area as television and film production and video games.
We are also well positioned to benefit from the surging demand from artists, who leverage three D and non three D content assets for the purposes of creating works of art using blockchain technology and non fungible tokens.
While we plot, our shutterstock and broader NFC strategy, we are already seeing world class internationally recognized artists leveraging turbo spreads unique high quality three D library to create original content.
For example, we're extremely proud that Mike Winkelman, the digital artist known as people as an active customer of turbo squid and Leverages our content for his unique and groundbreaking NFC exhibits.
He was recently recognized for his collage every days the first 5000 days at an auction making him among the top three most valuable living artists today as.
And as part of every day people creates and publishes new digital artwork every day and the project is now and its 14th year, which is truly astonishing and terms of its unique approach to digital creation.
And finally I want to talk about team and culture. As you know we've built out our capabilities as a team with key hires over the past 18 months, but this is only the beginning we also want to augment our ability to make decisions and take purposeful actions that reflect our values. For example include.
And and diversity are core to who we are as a company, we celebrate and draw strength from our differences weather differences and backgrounds cultures or perspectives.
We're excited to talk about some of the recent developments and initiatives that reflect our values.
Miguel Beecher joined Us as head of diversity equity and inclusion and early April.
Miguel is responsible for implementing our day I strategy and B will be working to support Shutterstock mission of building a workforce that is representative of the global community, we live in and serve.
You'll also be working closely with shutterstock existing employee resource groups, such as shades and told US who knows women at Shutterstock prism and seasons on.
Also in March we launched our all the best artists campaign, which showcases eight artists chosen based on factors like that.
Rate of specialty and cultural diversity from locales, like Thailand, Russia, Sweden, Cypress and Indonesia.
This campaign features a gallery showcasing their work and it is representative of the many diverse artists within our contributor community that are at the core to our premium content offering.
We also recently announced the launch of new there is a grant program affiliated with Shutterstock, the create fund to showcase and support under represented female and non binary creators working and areas like illustration three day modeling, writing photography and videography.
Rafi.
Other grants, we've announced involve efforts to raise awareness of climate change by supporting artists to portray our changing environment break the stigma surrounding mental health and support all their creators who have their own unique stories to tell.
In closing, we feel great about the start to the year.
Based on our strong first quarter and higher confidence and a continuation of the economic recovery, we are raising our revenue and EBITDA guidance for 2020 one.
And we steadfastly believe that focusing on innovation that Inc. Han says our customers workflow content that is relevant and fresh and data and insights that drive performance.
We'll drive steady revenue growth and consistent margin expansion and ultimately generate above market returns for our shareholders.
With that before turning the call over to Jarrett and I wanted to thank everyone again for joining US today also a big thank you to our amazing employees and contributors for helping deliver and impressive quarter.
We have exciting plans for the rest of the year as we continue to innovate with new product and content solutions all of which is delivered by the tremendous efforts of our team.
We look forward to updating you as the years as the year progresses.
And now I'll turn the call over to Jarrett.
Thank you Stan and good morning, everyone.
Shutterstock grew revenues, 14% and the first quarter or 11% on a constant currency basis, our third quarter of accelerating revenue growth.
Our revenue growth was broad based across revenue channels geographies and content types and industries.
Revenues benefited this quarter from the addition of turbo squid on February one, which added 3% to our growth as.
As well as the impact of foreign currency due to the weaker U S dollar, which added two 5%.
Our growth rate also benefited from the comparison to March 2020, and the demand impact of the pandemic and first started to materialize.
Stripping out the impact of FX and the Turbo squid acquisition first quarter growth was approximately 8%.
This is a strong data point that demand is strengthening and that is a try and destination for creative source digital content Shutterstock is well positioned to capitalize on the rebound.
Both our E Commerce and enterprise revenue channels performed strongly this quarter growth was led by our E Commerce channel, which grew 19% or 14%, excluding turbo squid, whereas our enterprise channel grew 5%.
We are pleased with the consecutive quarters of growth and enterprise and increasingly confident that the revenue channel has turned the corner in terms of sustainable growth.
From a geographic perspective revenue was up 13% and North America <unk>.
16% and Europe, and 12% and the rest of the world with increases coming from nearly every country, except those in South America.
European growth was strong and accelerated from the prior quarter and was also favorably impacted by currency movements.
The rest of the World had strength in Asia, and Australia, offset by softness in South America due to foreign currency and some country specific demand issues driven by COVID-19.
Gross margins for the quarter were 66% compared to 57% and 2020.
There are multiple factors contributing to the improvement in gross margins, including the advancement of technology is reducing the cost of content ingestion.
The annual rehearing of our contributor royalty program on January one.
And lower utilization.
While total revenue and subscribers increased year over year are paid downloads declined 2% from 2020.
The lower utilization benefited our gross margins and the quarter by 3%.
As utilization improves during the year it will negatively impact gross margins from current levels.
Sales and marketing expense was 23% of revenue as compared to 26% and the first quarter of 2020.
This decline is driven primarily from our efforts over the past year to reallocate our marketing spend to the channels with the greatest effectiveness.
On a nominal basis sales and marketing spend and the first quarter of $42 million was relatively flat from 2020. So we're seeing operating leverage and our model in terms of sales and marketing expense as a percentage of revenue.
Product development as a percentage of revenue declined 200 basis points due to a sharper focus on growth and innovation with fewer resources deployed towards the remediation of tech debt.
Our product development spend of $10 7 million is up 9% sequentially from the fourth quarter of 2020.
G&A expenses were 17% of revenue down from 19% of revenue and the first quarter of 2020.
On a nominal basis G&A expenses of $30 7 million were flat from the first quarter of 2020. So we are seeing operating leverage and our model in terms of G&A as a percentage of revenue.
The expansion and adjusted EBITDA margins to 38% resulted from the combination of accelerated revenue growth upside and gross margin and operating leverage across all major expense categories.
From the first quarter GAAP diluted EPS was <unk> 79, and adjusted diluted EPS was <unk> 98.
Representing growth of 558% and 277% respectively.
Turning to our balance sheet and cash flows.
At the end of the quarter, we had $364 million of cash down from $429 million at December 31, 2020.
The $65 million decline and cash is driven primarily from the acquisition of turbo squid.
And our free cash flow for the quarter was $26 8 million a year over year increase of 334% from the first quarter of 2020.
And our operating cash flow more than covered our annual bonus paid in the first quarter.
Cash flows for Capex content acquisitions, our quarterly dividend and taxes paid on the vesting of equity awards, which are issued on or withhold to cover basis.
Our deferred revenue balance of $154 million increased $4 million from December 31, 2020, and $15 million from the first quarter of 2020.
The growth and our deferred revenue is a strong leading indicator of the future growth and recognized revenue of our enterprise revenue channel.
Turning to our key operating metrics they were exceptionally strong for sugar stock during the quarter.
Subscriber count increased by 46% subscriber revenue increased by 20%.
Average revenue per customer increased by 4%.
Paid downloads were down, 2% and and revenue per download increased to $3 97 per download.
Our image library expanded by 12% and our footage library increased by 17%.
Our subscriber growth and subscriber revenue growth are driven by demand for our SMB and prosumer oriented smaller subscription products and some of the new products, we've brought to market over the past year.
Investors should remember that we introduced a range of new video and music subscription products and the back half of 2020 and we will over the next several quarters lap the introduction of those products and their contribution to our revenues.
As a result, we expect subscriber growth and subscriber revenue growth to come down from current levels.
With that being said, we are continuing to drive product level innovation to pivot our business towards a subscription model and introduced new subscription products for.
For example, we are excited about the launch of our Shutterstock flex subscriptions for small and medium sized businesses and are already seeing good demand signals and the market.
That product will have a more positive impact on subscription revenues and subscriber growth as it is and enterprise product.
Finally, I'd like to review, our revised guidance for the year.
Based on the results from the first quarter and a greater level of confidence for the remainder of the year. We are increasing our full year revenue adjusted EBITDA and adjusted earnings per share targets as follows.
Revenue of $720 million to $730 million, representing 8% to 95% annual revenue growth.
Adjusted EBITDA of $171 million to $177 million with margin expansion against the prior year, ranging from up 50 basis points to up 100 basis points.
Adjusted earnings per share of between $2 78 to $2 and 93.
Looking at revenue growth for the remainder of the year, we expect to see continued steady growth on our enterprise business.
The quarterly growth rate of E Commerce will moderate in the back half of the year as the comparables become more difficult and we lap the growth of some of our subscription successful product introductions in 2020 as I mentioned previously.
With respect to margins implied in our guidance, we expect a 300 to 400 basis point decline and gross margins based on the step up and earnings tiers achieved by our contributors as well as expected utilization increases.
Sales and marketing spend will increase by 200 basis points as a percentage of revenue as we maximize our opportunity to capture the rebound in demand.
Furthermore, we are hiring aggressively to execute on our business plan, which will increase G&A and product development.
We are pleased with our results as a management team and the very strong start to 2021.
We are experiencing accelerated revenue growth and based on our revised guidance. We are now confident and delivering another consecutive year of margin expansion.
We look forward to reinvesting our resources into new product and content solutions to continue to meet the need of Shutterstock customers.
Thank you so much for joining us today, we appreciate your time operator, we'd now like to open the line for any questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone till the day question Disbursed Apache. Please standby, while we compile the Q&A roster.
Our first question comes from the line of Don Carson.
On JMP Securities. Your line is open.
Great. Thanks for taking the question I appreciate it.
And then I wanted to ask you about the content verticals, you mentioned improving demand across our non content actually advertising verticals, you mentioned improving demand across auto entertainment media and travel and and strength in the quarter from Tech and retail can you just dive a little bit deeper here on these recovering trends and and you know Jeremy you talked about investing in the sales force just how shutterstock.
<unk> is positioned as as these and as these verticals come back online and then Jared you talked about gross margins coming into closer closer and all time high I believe and I think you mentioned a few of the drivers content ingestion and royalty change and utilization can you just talk about maybe of those three what drove maybe the outperformance and gross margins.
Thanks again.
Absolutely yes.
Yes, so we still have obviously some uneven.
Trends as it relates to advertising categories.
Tech and retail, which have fared significantly better where we.
Really no exception as part of our business as well and where we've seen significant growth.
We are seeing to starting to see some increased demand and some of the and some of the categories that have fared worse over the past year and for.
For us one of the one of the clear Bell.
Benefits that we have through introduction of some of our new services and the fact that we've become a turnkey solution for.
And for a lot of our clients so with the introduction of studios with our Riva.
Revamped editorial offering in addition to.
Our current content offering.
We're able to really support.
All of our customers somewhat differently than we could say a year year and a half ago.
And so it's it's a it's nice to see.
And that some of these categories are sort of starting to come back but in new.
No way and my implying that.
We're sort of.
Out of the woods there still.
There's still a lot of growth to be had and travel.
And the restaurant categories.
Food and service.
As well as.
Other categories that have been hurt by the pandemic also.
Geographically, we're seeing some unevenness as well for example, central and South America continue to be.
<unk> challenged in terms of in terms of business growth.
And Fortunately for US we have other being a global company. We have other areas that are more than making up for that business.
But it is nice to see that on and on balance.
And we are seeing definitely a recovery from a year ago.
Jerry do you want to touch on the gross margin questions.
Sure. Thanks, so much Ron.
And.
With respect to gross margins, we did see a nice uptick and gross margins year on year. I think this was to be expected as a result of the contributor royalty change and the reset that we experienced in January one of each year.
As you think about the reasons for the year over year uptick.
And the drivers they are more heavily weighted towards the change and the contributor royalty on <unk>.
Earnings tiers at the beginning of the year as well as utilization I would say, they're roughly evenly split between those two with less of a weighted on the automation in terms of content ingestion and processes. We're also doing some work behind the scenes in terms of lowering our cost of card acceptance and order to try and really drive our.
Gross margins going forward as.
As I mentioned in my prepared remarks investors should expect decline and gross margins as we look towards the next quarter and the back half of the year of 300 to 400 basis points.
And that's coming from the reset and our contributor earnings that were already seen in the month of March on as.
As well as expected upticks in terms of demand and utilization for our products. So I think that's something that we have good line of sight and visibility on at this point on that.
Hence the reason for from mentioning it.
Great. Thanks shirt, and just just to clarify that the decline is the sequential decline in gross margins correct.
Correct. The three to 400, great. Thank you correct.
Our next question comes from the line of New SaaS quality and the Truest Securities. Your line is open.
Great. Thank you. Good morning, guys just two questions on our eye on here first on the.
The enterprise up about 3% FX neutral.
And it looks like that that's a bit of a slowdown versus what it was in Q4, I think FX neutral was up 4% and it prior to that it has actually been making some pretty nice steady sequential progress I was wondering how does that 3% compare with your own expectations and where do you kind of see the enterprise growth kind of you know kind of.
Stabilizing as things reopen up and then on turbo squid.
I was just you know Stan you talked about some of the interesting things that they're doing including some involved in Indiana, and Muni and Ftes and I was wondering if you maybe can speak to your long term vision, there how does that new business kind of.
No.
And maybe altered the growth trajectory of your overall business or is it just kind of too early too small to really you know deal.
Deviate from that you know maybe.
I think you guys have talked about six seven and 8% growth and and and the business over time is sustainable. Thank you.
Yeah. So.
Jared do you want to talk quickly about <unk>.
Bookings growth in enterprise, and then and I'll take the I'll take the <unk> question that turbo squid question.
Sure So youssef.
And are correct and that on an FX neutral basis, there was a slight decline and recognized revenue and the first quarter for enterprise.
I don't think that's anything to read into.
If you look at our deferred revenue balances. We are seeing continued growth and deferred revenue as we are seeing continued growth and bookings I think we feel great about the business and the trajectory of the business and to answer your question more specifically I think this quarter's performance for us and enterprise was slightly above our expectations.
So we feel quite good about that and some of the demand signals that are coming out of the business.
And as Stan mentioned in his prepared remarks, there are certainly industry specific and geographic specific pockets of demand and lack of demand, but all things considered we are quite pleased with where we are in terms of enterprise and feel good about the sustainability of the revenue growth at this point and the remainder of the year.
Okay.
Thanks, Sharon and as it relates to turbo squid and three D.
Yeah, it's been it's really been a.
Really nice.
Addition to you know to the family and to be content suite.
We did see.
Growth.
And that exceeded our expectations a lot of that is focused on gaming and education categories, particularly with <unk>.
Visual effect and the growth and demand for visual effects.
When it comes to and Ftes and sort of where.
You know where this category is growing it's obviously.
And area, that's captured on a tremendous amount of interest and attention.
We're kind of and the early innings here Yusef, we're evaluating the opportunity to see how we can participate and the ecosystem.
And what we do know is that our content.
It plays a critical role and digital art so.
So we definitely stand to benefit from from the demand. We think there is a component.
Where we can really help contributors we think we can help our customers.
As well and so there's a this is something that we're sort of currently evaluating in terms of how we want to approach.
This opportunity.
So we'll have more to kind of report as we make more progress, but I would say, it's fairly early and our thinking.
About long term what this could mean.
And what technologies like Ftes and blockchain could mean for our business.
That's helpful. Thank you both.
Our next question comes from the line of Sean and Bryan with Stifel. Your line is open.
Great. Thank you and I guess this one is for Stan and just just following up on net the NFC opportunity.
And we'll try to keep my head out of the clubs here from the moment, but.
Obviously, no one knows exactly what the future looks like for digital assets being on the block chain, it's great that it sounds like you're you're leaning into helping artists with your existing product capabilities and thinking through.
How you can maybe participate a little more deliberately and the future.
And just drilling and a little bit more.
Do you see and more obvious opportunity.
On.
And the content creators licensing works on that can be used.
And on these assets do you think that the opportunity is maybe a little more interesting on working with the artist kind of compiling composites of of images and videos graphic designs.
How are you thinking about I guess the two sides.
Of that and then just in terms of kind of broader looking at the potential to be more of a marketplace for assets. Like this is that something that that even comes into consideration.
Yes, so we are thinking about it across.
The two sided marketplace John.
And you described there are opportunities for the contributors themselves.
Two.
To sort of help define.
Ownership of assets as.
And as well as obviously as a creator to distribute those assets.
And then for customers, obviously, it's a M.
Having similar too.
Collectibles and other.
Category sort of having that peace of mind, and having the ability of sort of understanding that.
The ownership is a clear and defined.
And through in Ftes, I think is something that.
Can create.
And interesting sort of marketplace.
With all that said.
There is much to be.
<unk> learned and discovered particularly because content is protected.
And so we are.
And as we're evaluating.
And how we want to sort of help contributors and how we want to help our customers and we want to keep in mind.
And the fact that whether its the raw assets or whether it's a collage or a completed piece of art.
There are there.
There are rules that and.
And protections that we need to sort of keep in mind to ultimately protect our artists and.
And so these are all the sort of questions and challenges that we're thinking through around how this how this part of our marketplace can grow and so it's.
The use cases are easy to sort of are easy to define its the.
And it's the execution, that's a little bit more difficult and challenging because of you know.
Factors that are that are more legal in nature.
Thank you.
Again, if you would like to ask a question press star one on your telephone.
Our next question comes from the line of Bernie Mcternan with Needham and company. Your line is open.
Great. Thank you for taking the question just wanted to stick on Turbo squid, just a question on if the.
Are they new customers coming to the platform or are you growing wallet share within existing customers and the potential for cross sell opportunities and then also if they are new customers to the platform or the economics inherently different than traditional customer.
Yes, great question, I'll, let Jerry and touch on the economics, what I can tell you is that you know.
Historically, working with three D required a level of.
And our skill set.
On the professional creative.
And one that has.
Sort of a unique skill set and so a lot of the customers.
And that we have our new.
A lot of the Creatives that we brought to the to the platform our new.
With that said, we do have plans to sort of create.
Two D versions of our <unk> content and introduce that too.
Our.
On to our existing customers and there are several other use cases, where we feel particularly in the enterprise.
Where we can provide a wider.
Breadth of <unk>.
Content and services.
For customers that have.
And more sophisticated or unique needs such as retail.
You can imagine how this type of implementation can be extremely engaging drive more sales for retailers et cetera.
So I think it's.
It's a really nice extension and that you're right. It does kind of bring a new customer set to us but also.
As it relates to the type of solution that we can.
And our and our mission to sort of be a turnkey solution for our customers.
Definitely helps to close that loop.
Absolutely and Bernie Thanks for joining the call. We're really looking forward to working with you and and having you cover the company.
Just in terms of the economics of <unk> content.
Because there is.
Slightly higher payouts, two contributors and because there is a higher degree of exclusive content and the turbo squid marketplace. The unit economics and the gross margin characteristics are somewhat lower than our core business and I think thats, something we knew and understood.
We went into this business clearly there is a tremendous amount of effort and expertise that goes into creating these beautiful three D works of art that are up on turbo squid and this is ultimately how.
And the contributors are remunerated for the work that they do.
And we do see the supply continuing to grow significantly in terms of the amount of content that is up on turbo squid and we're doing a number of things behind the scenes to really try and expand the supply side and build the supply of content.
For our customers not only the traditional customers of turbo squid, but also for some of the interesting use cases that atypical shutterstock customer would have on.
Whether it be for a website creation, whether it would be for digital marketing, whether it would be four four for streaming or other use cases outside of the core of gaming and and visual effects development four for TV. So it is really great to see the supply side picking up it's great to see some.
Are those new use cases that we're going to make available for that content to be leveraged and.
And so we feel we feel very good about.
Turbo squid, we feel very good about the future of three D and we feel very good about.
And the expanding use cases for our customers as well as the supply side and some of the increased works that are coming into the three new marketplace.
Great. Thank you very much really appreciate that and looking forward to working with you guys as well.
There are no further questions at this time now I'll turn the call back over to Stan Pavlovsky.
Thank you so much for joining our call today and closing thank you to all of our customers contributors and employees 'twenty 'twenty. One is off to a strong start and I am pleased with shutterstock position and the marketplace and confident and our ability to thrive in this rapidly changing world and with that that ends our call for the day.
That concludes today's conference call. Thank you for participating you may now disconnect.
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