Earnings Call: Q2 2016

Aug 4, 2016

Good day, ladies and gentlemen, and welcome to the Second Quarter 2016 Shutterstock Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Craig Hellenstein. You may begin. Thank you, operator. Good morning, everyone, and thank you for joining us for Shutterstock's Q2 2016 earnings call. Joining me today is John Oringer, our Founder, Chief Executive Officer and Chairman and Steven Burns, our Chief Financial Officer. During this call, management may make forward looking statements that are subject to risk and uncertainty, including predictions, expectations, estimates and other information. These include statements related to the expansion of our addressable market, the success of new product offerings, revenue growth and the predictability of our revenue, adjusted EBITDA, equity based compensation, taxes, capital expenditures and other financial measures. Our actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. Please refer to today's press release and the reports and documents we file from time to time with the U. S. Securities and Exchange Commission, including the section entitled Risk Factors in the company's Form 10 ks for discussions of important risk factors that could cause actual results to differ materially from those discussed in any forward looking statements we may make on this call. On this call, we will refer to adjusted EBITDA, non GAAP net income and free cash flow, are non GAAP financial measures. You can find a description of these items along with the reconciliation of the most directly comparable GAAP financial measures in today's earnings release, which is posted on the Investor Relations section of our website. We believe that the use of these measures provides important additional insights for investors. However, these non GAAP financial measures should not be considered in isolation from or as a substitute to financial information prepared in accordance with GAAP. All that out of the way, I'll turn the call over to John. Thanks, Craig. Thank you, everyone, for joining us this morning. Shutterstock delivered another quarter of strong financial results as our consistent focus on providing the best content, the best search experience and the most innovative technology solutions continues to generate sustained growth across both sides of our diverse marketplace. By delivering a truly differentiated offering, we continue to attract a growing and engaged customer base, fueling the demand for quality content. This increased demand fosters bigger payouts for our contributors and encourages them to provide their best and freshest content to Shutterstock, further facilitating the network effects of our business. This past quarter alone, our 130,000 plus contributors added over 11,000,000 high quality images to our royalty free library, even as we maintain a stringent review process for every single image submitted. The growth in our library this past quarter was nearly double the number of images we added in the quarter of 2015 and is the most images Shutterstock has ever added in a single quarter. Today, we offer over 93,000,000 high quality photos, vectors and illustrations to customers of all types and sizes. We also continue to capitalize on the growing demand for stock video. Our library now has over 5,000,000 clips, an increase of more than 70% versus the 2nd quarter 1 year ago. As our traditional image and video platforms expand rapidly, we're also focused on further diversifying our portfolio of content offerings. We have mentioned in the past how many of our existing customers are looking to us for editorial content, and we're building our offering to capitalize on this demand. Thus far in 2016, we have already covered well over 1500 events, including the Academy Awards, the Cannes Film Festival and the New York and European Fashion Week, supplying hundreds of thousands of images to our customers in real time. It's very early days for us in editorial and we see a huge amount of opportunity to deliver additional value to our customers. Also continue to capitalize on the opportunity in the royalty free music space as the demand for highly curated content growth. Nearly 100% of our music tracks are now exclusive to Shutterstock and with the recent launch of a comprehensive music offering to our enterprise customers, we are well situated to meet the growing demands in the space. With the breadth and depth of our product offering expanding rapidly, we recognize how important it is to provide tools to help our customers navigate our fast growing content collection. From day 1, we have spent considerable resources to ensure we maintain a leadership position in search technology, enabling our customers to find the content they need quickly. We have built upon this legacy with our launch earlier this year, a reverse image search, allowing users to upload an image and simply find similar content on our site that is ready to be licensed. Initial indications remain very positive with search success rate for reverse image nearly 15% higher than traditional search methods. And we're seeing significant usage internationally as reverse image eliminates many of the language barriers associated with text based searches. When I look at the progress we have made in the past 6 months, despite investing considerable time, energy and resources into migrating our technology platform, I couldn't be more excited about the possibilities that remain in front of us. The bulk of our tech transition will be completed on schedule by the end of this year. And once we have moved to a fully services oriented architecture, we expect to be even more nimble and innovative across all aspects of our company. Shutterstock's sustained commitment to delivering the best content, search capabilities and innovative technology solutions continues to attract customers to our platform. We added more first time users than ever before during the Q2 and nearly 1,600,000 customers have downloaded content over the past 12 months. Given the quality of the user experience, we also continue to see remarkably high level of revenue retention with rates exceeding 95% over the past year. One of the key drivers of our high retention rates is the increased spend we're seeing across our enterprise customer base. In many cases, we still compromise we still comprise a very relatively small portion of the overall stock content spend for these companies. But as they interact with our products and services and see the value of the experience we provide, we generate more and more revenue per customer. Not only are they downloading more traditional stock images, but we're seeing an increased number of businesses take advantage of our footage, editorial and music offerings. In fact, thus far in 2016, we have seen a 33% lift in the number of enterprise customers who are purchasing additional products. As we further expand our content and workflow offerings, we see significant opportunity to increase our overall market share. As we capture a larger share of wallet, the bigger driver of enterprise growth today continues to be converting our traditional e commerce accounts into deeper enterprise relationships. We now have nearly 32,000 enterprise customers growing close to 80% from the same period a year ago, but we still have only converted about 2% of our existing customer base thus far. So we see significant opportunity to upgrade additional e commerce clients over time. One other area of growth within our enterprise business, which is not reflected in our customers in our customer numbers is the traction we're getting off our API relationships. Many of you are familiar with some of our previous partnership such as those with Facebook and Sprinklr. And since our last earnings call, we finalized 2 additional agreements that provide integrated access to Shutterstock's collection. In May, we collaborated with Microsoft on a plug in for their industry leading PowerPoint application. And last month, we announced our integration with Google that provides a visual element to their digital and mobile advertising products. These latest agreements are evidence of the innovative ways in which we are reaching new customers and also speaks to the overarching appeal of our content and technology platform within a world that's becoming increasingly visually focused. While the initial financial implications of these agreements are not currently material to our financial performance, the ability to grow these relationships and extend the reach of our content provides a real opportunity in the years to come. Overall, we're very pleased with the results from this past quarter and the operating momentum we're generating across all facets of our company. Both sides of our marketplace remain vibrant and we continue to deliver strong growth from our traditional image and video businesses, even as we invest in building out new content types and differentiated workflow opportunities that will increase demand and engagement across our platform. Cultivating the unique network effects that we have built remains an absolute priority, so we can continue to build value for years to come. And now let me turn the call over to Stephen to walk you through our financial results. Thanks, John, and thanks, everyone, for joining us this morning. Before I discuss our performance, I want to let you know that we have posted a brief presentation deck on our website, which contains supporting materials for our quarterly results as well as other items discussed on today's call. As John highlighted, both sides of Shutterstock's marketplace continued to expand rapidly and the significant operating momentum we are generating from the powerful network effects of our business model is translating into sustained financial growth. During the Q2, we delivered revenue growth on a reported basis of 19%, while adjusted EBITDA growth of 9% as compared to the Q2 of 2015. Excluding the impact of currency movements in the quarter versus the prior year, revenue growth was approximately 22% and adjusted EBITDA increased 15% as we continue to see strong gains from our enterprise offering as well as from our traditional e commerce, image and footage products. We continue to see solid trends across key metrics as we attract new customers across multiple content types and build increasing customer lifetime value. This past quarter, our user base expanded to nearly 1,600,000 customers, including an approximately 80% increase in our enterprise customer base versus the Q2 a year ago. We also saw a 21% increase in paid downloads, primarily from new subscribers, but also from a higher level of activity across our existing subscriber base in conjunction with the new monthly download limits we introduced during the Q2 of 2015. While this increased engagement is delivering greater lifetime customer value from longer retention as customers further integrate our products into their workflow. As we mentioned last quarter, in the short term, the increased usage is actually a drag on our revenue per download. On a reported basis, revenue per download declined 1% this past quarter. However, excluding currency movements, it was up 1% versus the Q2 of 2015. Over time, we certainly expect this metric to be favorable on a year over year basis as we further grow enterprise sales and generate increased consumption across our video, editorial and music products, which carry a higher average prices than our e commerce image platform. However, given that subscription downloads make up the vast majority of the content download activity today, in the short term, the revenue per download trend will primarily be a byproduct of increased customer usage as we anniversary the monthly limits and increased adoption of the 350 image plan that was launched in April of 2015. As Shutterstock generates strong revenue growth across a diverse set of asset types, we are also benefiting from the geographic diversity of our customer base. Currently, 40 of our revenues are from customers in North America, 33% are from customers in Europe and 27% from Asia Pacific. Each of these regions is growing at double digit growth rates for us and we continue to see strong momentum in nearly every country and region. Shifting to the cost side of the business, we continue to align our spending with the revenue opportunities we see across our platform. Operating expenses increased 20% versus the Q2 a year ago, primarily driven by higher contributor royalties associated with our growing revenue. Contributor royalties were approximately 29% of revenue in the 2nd quarter, which was consistent with the year ago period. Sales and marketing expense increased 16% versus the Q2 a year ago, excluding stock compensation which excludes stock compensation and it was approximately 24% of revenue. As expected and as we highlighted on our last call, total marketing expense as a percentage of revenue during the Q2 returned to similar levels as in 2015 as we grow our traditional businesses and capitalize on newer opportunities such as music and editorial. Overall, the cost of acquiring a customer remains relatively steady and the return on our marketing investment remains strong as we drive new customers to our platform while keeping retention and repurchase rates high across both subscription and on demand products. Product and development costs, excluding stock based compensation, increased 18% in the Q2 versus a year ago, primarily due to higher personnel and consulting costs related to building a more expansive user experience and transitioning our tech platform, and this was partially offset by increased capitalized labor of approximately $3,000,000 Excluding stock based compensation, G and A expenses increased 39% for the Q2 versus the same period a year ago, primarily driven by higher personnel costs as well as an increase in our bad debt reserve. Overall, our revenue growth in the second quarter along with a controlled cost base translated into solid adjusted EBITDA growth. On a reported basis, adjusted EBITDA was up 9% in the quarter and once again excluding the impact of currency, it was up approximately 15%. It is important to note that we are delivering this growth even as we focus on expanding our capabilities by investing in personnel, product development and technology, so we can further strengthen our top line results and continue to innovate to build additional long term value. GAAP net income in the quarter was $7,200,000 or $0.20 per share, that's per diluted share as compared to $5,300,000 or $0.15 per share. In the Q2 of 2015, with the increase driven by improved operating performance as well as lower stock based compensation expense and a decrease in income tax expense. The decline in income tax expense for the quarter was primarily driven by the release of a tax reserve resulting from the lapse of a statute of limitations on a specific item. Excluding this reversal, the effective tax rate would have been approximately 39%, which also reflects an increase in income generated in jurisdictions with lower effective tax rates. Primarily as a result of these 2nd quarter items, we now expect our effective tax rate for 2016 to be under 40%. The effective tax rate for the year could be further impacted as we continue to optimize the company's operations. We will of course update you on our progress and the impact on the full year expectations for Tax Street on our next quarterly conference call. Non GAAP net income, which excludes the after tax impact of non cash equity based compensation expense, as well as excluding the amortization of acquisition related intangibles and changes in the fair value of contingent consideration related to acquisitions, was $12,700,000 or $0.36 per share, an increase of 13% versus the Q2 of last year. Turning to our balance sheet. We generated $9,300,000 of free cash flow this quarter and finished June with $266,000,000 of cash and short term investments. Please note that included in the calculation of free cash flow results for the 2nd quarter was a $1,600,000 contingent consideration payment related to the 2,004 acquisition of Webdam. Given the strength of our balance sheet, the sustained operating momentum across the company and our belief that our share price has not been reflective of the value of the company and our prospects, we continue to repurchase shares during the Q2 as part of our $100,000,000 share repurchase program, which was launched in the Q4 of 2015. During the second quarter, we repurchased over $16,000,000 worth of stock, reducing our share count by approximately 399,000 shares. We have repurchased 1,700,000 shares to date under this plan for approximately $59,700,000 and this represents more than 8% of the non insider owned shares. It is important to note that our first priority for capital allocation remains unchanged and that is investing in our existing business as well as evaluating external growth opportunities and potential investments there to enhance our long term profitable growth profile. Looking to the remainder of 2016, we remain very encouraged by the operating momentum across the entire business and despite an anticipated additional $2,000,000 to $3,000,000 of foreign currency impact to our revenues related to the recent movements in the British pound, our full year guidance remains unchanged, which is revenue of between $495,000,000 $510,000,000 and adjusted EBITDA of between $95,000,000 and $100,000,000 These expectations include the financial costs associated with our technology platform migration and assume that current FX rates hold for the balance of the year. At these current exchange rates, we anticipate a headwind of 3 to 4 percentage points on full year revenue growth and 9 to 10 percentage points on EBITDA growth. Please remember that we record revenue at the exchange rates at the time a product is sold as opposed to when the actual download by the customer occurs. As a result, the impact of currency movement tends to lag the shift in market currency rates and the ultimate FX effect will depend on the actual exchange rate and the timing of downloads. We anticipate the currency impact in the Q3 will be similar to what we've experienced in the Q2 of this year. We thank you for the time this morning. And now John and I will be happy to answer any questions you may have. Michelle, can you please open up the lines for the Q and A period? Our first question comes from Ralph Schackart of William Blair. Your line is open. Good morning. A couple of questions if I could. Maybe we'll start off with John with the competitive question that you normally get, sort of any changes you saw in the quarter. And then maybe just a bolt on to that, what do you think is sort of the driver just in terms of how you're able to add the most amount of time users this quarter than ever before? I'll start with the competitive dynamic. My answer is the same as it has always been. It's a competitive market. It continues to change around us and we continue to innovate faster and faster and stay ahead of all of our competitors. There's not much other not much else that has changed. As it relates to the addition of more customers, I think it's a function of our first, the world is obviously becoming more visually focused and there's more people coming online. But when we look at our top 15 markets, in the second quarter as well as in the first half, in all of those 15 markets, we experienced significant double digit growth with 2 exceptions and that's 2 exceptions are 1, Turkey where there's been a disruption obviously in the marketplace, but we still had growth. It just was not at the double digit, significant double digit level or double digit, but it did grow. And Brazil where we were effectively flat primarily due to currency changes and pricing in that marketplace as it relates to the Brazilian real versus U. S. Dollar. So we're seeing really a diversity of growth that really is driving the business as well as, as we've talked about, significant opportunities in all of these markets. One more thing on the competitive question, the Google deal. Google could have chose any one of the image providers in our space. They went with Shutterstock. They went with Shutterstock because of the speed and stability of our API and how much we know about our customers and the images that we sell. And that is actually one change and that's a positive indication of how we're doing. Maybe just a follow-up to that, John. If you sort of roll up all your API deals that you have to date, I know you said near term it won't sort of be a big contributor, but maybe if you sort of help us think about that opportunity and the implications for the revenue model for Shutterstock going forward? Yes. We don't separate any one of these deals out and quantify them. But I think it says something about our platform. It says something about how we operate as a company that Google, Facebook, Sprinklr, some of the biggest companies out there are choosing Shutterstock to partner with us. We have well over 100 partnerships today. We provide images. We provide intelligence about how people are using images. And we know the most about the customers in the space given that we sell 5 images every single second. Okay. Thank you. Next question, operator. Our next question comes from Youssef Squali of Cantor Fitzgerald. Your line is open. Yes. Thank you very much. John, with the enterprise video audio contribution to growth pretty substantial. I was just wondering if you step back and you look at the growth in the business over the last 2 or 3 years, we've gone from mid-30s in 2014 to 30% in 2015 to now, call it, 18% at the midpoint of your guidance for 2016. Do you see anything on the horizon that could actually help reaccelerate the top line growth in the business? Or is this basically just the nature of this segment considering that your competitors are not growing at all? That's 1. And 2, on the replatforming, can you maybe put the departure of the CTO in perspective for us? And just generally, I think you talked about how the bulk of the tech transition should be happening by end of year. What should we expect in terms of benefits from this replatform and particularly on the P and L? Thank you. Yes, I'll start and then Stephen will jump in. I think the replatform piece of what you're talking about of your question, applies to both parts of your question actually. We're spending a lot of time on a re platform because we believe that the world is getting more visual and we need to deliver images, video and audio in lots of different ways. And we're spending a lot of energy now on that. We're doing all of this because we believe that in the future, there's a lot of growth left in this business and we can continue to innovate in different ways for our customers to use our images and make money with them. As it relates to the growth rate, first, I think, obviously, currency has been an impact. Revenue growth, our guidance was over 20% excluding currency and that's where we're performing. We expected that 20 16 would be a year of migration on our tech platform. And therefore, as we've talked about, we expect a material change in our ability to develop and launch functionality and products for our customers to solve their problems, to make their workflow better, faster, more valuable to them and their clients. And so that was everything we were talking about was expected. But that reacceleration of growth that we've talked about both in images but also in areas like editorial and music and video as well as the enterprise offering across those products, we believe will enable us to grow our growth rate as we move into the latter years. We haven't given guidance yet for 2017 beyond, but certainly as we get into that period, we'll certainly have a more robust conversation about the drivers of our expected growth in future periods. As it relates to go ahead. Yes, go ahead. No, no, no. You got it. I was just going to say as it relates to the management question, John, do you want to? Yes, I'm happy to address that. We're focused on having the right people at the right time in the organization to build what we need to build. But there are people coming and going from the organization all the time and we continue to focus on getting the smartest people in the organization to help us with our problems. Today, the management team is stable. Today, the management team has tons of smart people on it with very diversified talents, and we continue to build on it. And as far as specifically the CTO goes, we'll find the right one. And I think it's not inconsistent with what you would probably hear from the management teams of most companies today that it is a very competitive market for top talent and we are out there competing aggressively for that top talent to continue to drive our business as well as make sure that we attract I'm sorry, retain our people. And it's really last thing I'd say is, we're growing at a rapid rate. We are energetic about where we're headed and we going from $500,000,000 and beyond in revenue is certainly a place that requires a set of skills that is different than a set of skills that may have existed before. Some people adapt and other people don't necessarily they're not necessarily up for that. And that's all well and good. We think the other thing is to say that we've had great people here who've gone on and delivered for other companies. And some of that is attributable to the experience that they had here at Shutterstock. So very excited about the future with the team we have and the team that is yet to be joining us. Great. Thanks. Thanks a lot for the insight. My last question would be again for you, Stephen. If I look at your CapEx, it looks like you've taken your CapEx from $25,000,000 at least guidance for 2016 from $25,000,000 to $30,000,000 to $35,000,000 Is that related to the replatforming? And if so, as we look at 2017 and beyond, is there a step down function from that for non recurring expenditures? Thanks. So as it relates to that question, the answer is yes, it is up slightly year over year, still an estimate. We treat all of these things as 0 base. And so as we go into 2017, we're going to certainly look at the at that from a what's needed for the business. We don't use the current year as a base. A couple of the items driving this in 2016 are the TechRe platform as well as some content acquisition that we've done on both editorial as well as on the music side. And then in on the we took additional space here in the Empire State Building on the 36th floor, just given the growth in the business. And so that is, call it, an unusual and infrequent event. We don't expect to take another floor, if you would, or any sizable incremental real estate in 2017. Great. Thank you. Next question, operator. Our next question comes from Lloyd Walmsley of Deutsche Bank. Your line is open. Hi. This is Aki Agarwal on for Lloyd. Thanks for taking our question. Just a quick one, anything you can share in terms of sales force productivity? Any updates there? And then do you think you have all the bodies you need? Or do we expect more hiring going forward? Thank you. So as we look into 2016, we are we have a very productive sales force. We continue to expand our sales force in those regions and areas where needed. So specifically in enterprise and in certain parts of the world, Asia Pacific and Europe, we've increased headcount to take advantage of the opportunity. They're extremely productive today on our sales force. They take about 9 months to ramp up. And but after that, that ramp up gets them to a point where the acceleration of revenue per salesperson is very strong. We're doing an extremely good job in sales in harvesting existing accounts as well as targeting new accounts. And as I've talked about, we are implementing a new application environment, the salesforce.com product for sales and service as well as Workday on our financial ecosystem and the combination of our people with these improved productivity from the technology applications we expect will further drive our sales productivity. Great. Thank you. Our next question comes from Andrew Bruckner of RBC. Your line is open. Thank you. Two quick questions, if I could. The first one, for payouts to photographers and artists, where do you see that eventually going in terms of how competitive the market is and who else they're competing against to submit these images? And the second one, you mentioned a bad debt reserve increase, Stephen. Does that have something to do with the changing customer base? Can you just flush that out a little bit? Thank you. Sure. So as it relates to contributor royalties, it has been in or around the 30% number for I'd say since the beginning of time of Shutterstock for 13 years. So we think that what drives contributors to use Shutterstock as what I'll refer to as we believe their favorite platform and really for some their only platform. What we have is a situation where they are making more money on Shutterstock. And so the 30% is a function not just of a fair return to them, but it's also reflective of the fact that the activity that they are seeing on Shutterstock from the buyers and licensors, I should say, the licensees of their content is significant and so they're making more money. So we haven't we see no reason for that to vary and we think the competitive environment continues to drive towards its 30%. As it relates to the bad debt reserve, historically the company had enterprise sales and had not had the same level of effort required to address some of those receivables and collect them. We have substantially increased the level of effort to collect those receivables and to make sure that we have a focus on rapid collection of our receivables specifically from enterprise customers because of course on the e commerce platform that's generally electronic payment that comes via credit card or similar type of payment. And so we believe that this was an appropriate reserve for some of these historical receivables that we had on the books. Thank you. Our next question comes from Aaron Kessler of Raymond James. Your line is open. Great. Thanks guys. First on the Google deal, any more details you can provide in terms of maybe how the economics work on a deal like that? And specifically maybe what products it is for? It sounds like it might be a new offering from Google to bring kind of product listing ads to new categories. 2nd, can you just provide us maybe as an update on kind of the revenue mix where it currently stands between subscription, on demand as well as video, enterprise and music? Thank you. On Google, it's for their ad products. Same as Facebook, it's for ad products for to get customers creating more ads. These platforms know that when advertisements are more visual, people click on them more, they engage with them more and they convert their customers better. That's what's driven our business for the past 13 years and that's why ads are increasingly getting more and more visual and platforms that rely on advertisements for their revenue are experimenting more with visual ads. Yes. And the specific terms of our arrangement with Google and really with any client, we don't discuss those. But we to John's earlier point, the selection by Google of Shutterstock, I think is a reflection based on what we've heard from them and obviously their choice of the speed, the latency, the effectiveness of our API as well as the content that it delivers. As it relates to the breakdown question on revenue, we can give some directional response here, which is video and music well over represent well over 10% on a combined basis. Enterprise is close to approximately 30%, which is up from the high 20s earlier this year. And subscription represents about a third of our revenue with on demand between the 35% 40% though. Great. Thanks so much. Sure. Our next question comes This is John Streppa on for Brian. Thanks for taking my question. Maybe if you guys could just highlight, any investments that you guys are making in technology around search on video? Just seems like it's a little bit harder searching on video than it is on images. And then I got a quick follow-up. Thanks. Yes. Search on video is more difficult. Video in general is more difficult to work with than images. But, we see the tools to manipulate this type of content, get easier and easier to use every year. And that's why we also see more and more people able to use this content. There is pressure there's a lot of pressure on creative to become more animated with their visuals to catch the attention of the people they're trying to attract. And so we see more and more video usage every year. We think that it's going to continuously get easier and easier for people and we actually focus on our website too to make sure that the workflow and tools for when it comes to video are as easy as they possibly could be. Great. Thanks. And then maybe looking at just like the FX impacts for contributor on the contributor side. I know you walked us through the revenue, but maybe just remind us how kind of the FX impacts when you have contributors from all across the world as well? Thank you. Right. So for contributors, we're basically paying in U. S. Dollars and it's converted at the time of the transaction. So if a customer signs up with us, we are converting that at the current exchange rate and then paying that contributor in U. S. Dollars. Great. Thanks guys. Sure. Time for one last question. Once again, Our next question comes from Blake Harper of Loews Capital. I had most of my questions answered, but just wanted to ask about some of the mobile tools I think you updated or had launched some tools for the contributor side and then had some others for your customer side. But just wanted to see if you're seeing any increase in engagement or traction with those there and kind of how you if you have any update as far as the what you would think as far as mobile tools once you make the tech migration by later this year? Yes, mobile is important for us. On the buyer side, it's still primarily the desktop where we see most of the usage for images on the contributor side and also occasionally on the buyer side too, we see more and more usage through our iOS and our Android applications. Both of the applications we continuously release new features on and reverse image search is actually something that's really important on the buyer side. We find that sometimes people will that are creative, that are our customers will see something that they'd like to use in one of their projects. They may not be they may not have the equipment with them to shoot that photo. They may not have the model releases for the people in that photo right in front of them. So what they can do is they can shoot the scene that they're literally looking at and get images that look like that that are commercially released off of our website. We think that's a pretty amazing kind of shift in the way people buy images. Our customers are really excited by it and we see a lot of them using it. All right. Thanks. Actually one more thing on the contributor side. We've made it easier and easier for people to contribute images via mobile and the cameras on phones, as you all know, are getting to be pretty amazing. So we now are seeing more and more images come through mobile devices. And that's part of the reason why our library keeps growing faster and faster. So we want to continuously enable our contributors to be able to produce that content right from their mobile devices wherever they are. Okay. That's great color. Thanks, John. Thank you for joining us today. If you have any follow-up questions, please let us know here in New York and we look forward to talking to you later. Thanks. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.