SSTK 10-K & 10-Q changes, risk factors and insider trading

•Our inability to complete the Merger, or to complete the Merger in a timely manner, including as a result of the failure to obtain required regulatory approvals or the failure to satisfy the other conditions to the consummation of the Merger could negatively affect our business, financial condition and results of operations.Merger.

•The success of our business depends on our ability to continue to attract and retain customers of, and contributors to, our creative platform. If customers reduce or cease their spending with us, or if content contributors reduce or end their participation on our platform, our business will be harmed.

•The industry in which we operate is highly competitive with low barriers to entry and if we do not compete effectively, our operating results could suffer.entry.

•IfOur weability cannotto continue to innovate technologically or develop, market and offer new products and services, or enhance existing technology and products and services to meet customer requirements, our ability to grow our revenue could be impaired.requirements.

•UnlessOur weability to increase market awareness of our brand and our existing and new products and services, our revenue may not continue to grow.services.

•In order to continue to attract large corporate customers, weWe may encounter greater pricing pressure, and increased service, indemnification and working capital requirements, each of which could increase our costs and harm our business and operating results.requirements.

•Expansion of our operations into new products, services and technologies, including content categories, is inherently risky and may subject us to additional business, legal, financial and competitive risks.risky.

•The impact of worldwide economic, political and social conditions, including effects on advertising and marketing budgets, may adversely affect our business and operating results.budgets.

•Issues relating to the development and use of newAI, andincluding evolving technologies, such asgenerative AI, in our offerings couldmay adverselyresult affectin ourreputational businessharm, liability and operatingadverse financial results.

•If we do not effectively manage changes to, and retain our sales force, we may be unable to add new customers or increase sales to our existing customers, and our revenue growth and business could be adversely affected.customers.

•We have continued to grow in recent periods and if we fail to effectively manage ourthis growth, our business and operating results may suffer.

•IfOur weability do notto successfully make, integrate and maintain acquisitions and investments, our business could be adversely impacted.investments.

•WeOur rely on highly skilled personnel and if we are unableability to retain and motivate key personnel, attract qualified personnel, integrate new members of our management team orand maintain our corporate culture, we may not be able to grow effectively.culture.

•The non-payment or late payments of amounts due to us from certain customers may negatively impact our financial condition.customers.

•We are subject to payment-related risks that may result in higher operating costs or the inability to process payments, either of which could harm our financial condition and results of operations.payments.

•We have incurred debt which could have a negative impact on our financing options and liquidity position, which could in turn adversely affect our business.position.

•Assertions by third parties of infringement of intellectual property rights related to our technology could result in significant costs and substantially harm our business and operating results.technology.

•We collect, store, process, transmit and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, information security and data protection in many jurisdictions. Any cybersecurity incidents or our actual or perceived failure to comply with such legal obligations by us, or by our third-party service providers or partners, could harm our business.

•Catastrophic events or other interruptions or failures of our information technology systems could hurt our ability to effectively provide our products and services, which could harm our reputation and brand and adversely affect our business and operating results.systems.

•GovernmentEvolving government regulation of the internet, and regulatory inquiries and investigations, both in the United States and abroad, is evolving and unfavorable changes could have a negative impact on our business.abroad.

•ActionActions by governments to restrict access to, or operation of, our services or the content we distribute in their countries could substantially harm our reputation, business and financial results.countries.

•Income tax laws or regulations could be enacted or changed and existing income tax laws or regulations could be applied to us in a manner that could increase the costs of our products and services, which could harm our financial condition and results of operations.services.

•We may be exposed to greater than anticipated withholding, sales, use, value added and other non-income tax liabilities, including as a result of future changes in laws or regulations, which could harm our financial condition and results of operations.regulations.

•Purchases of shares of our common stock pursuant to our share repurchase program may affect the value of our common stock and diminish our cash reserves, and there can be no assurance that our share repurchase program will enhance stockholder value.reserves.

•If we fail to maintain an effective system of internal control over financial reporting, we may not be able to report our financial results accurately or in a timely fashion, and we may not be able to prevent fraud; in such case, our stockholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our stock.fraud.

The Merger is subject to various closing conditions, such as receipt of required regulatory approval and the approval of Shutterstock’s stockholders, among other customary closing conditions. ItAs previously disclosed, on April 2, 2025, the Company and Getty Images each received a Request for Additional Information and Documentary Material from the U.S. Department of Justice (“DOJ”) in connection with the Merger and on November 3, 2025, the Company announced that the CMA has referred the Merger to a Phase 2 review process. The Company remains committed to the proposed Merger and will continue to engage with the DOJ and the CMA and work with Getty Images to expeditiously secure the necessary clearances. However, it is possible that the regulators may prohibit, enjoin or refuse to grant approval for the consummation of the Merger. If any condition to the closing of the Merger is not satisfied or, if permissible, not waived, the Merger will not be completed. In addition, satisfying the conditions to the closing of the Merger may take longer than we expect. There can be no assurance that the remaining conditions to closing will be satisfied or waived or that other events will not intervene to delay or result in the failure to consummate the Merger.

In addition, our employees, including key personnel, may be uncertain about their future roles and relationships with us following the completion of the Merger, which has in the past and may continue to adversely affect our ability to retain and motivate them or to hire new employees. Moreover, while the Merger is pending, the potential disruption of plans or diversion of management’s attention from our ongoing business operations could adversely affect our business, financial condition and results of operations.

WeComplaints have been filed against us and our board of directors, and we and Getty Images have received demand letters, in connection with the Merger. In addition, we may become subject to lawsuits relating to the Merger, which could adversely affect our business, financial condition and operating results.

Further, our growth strategy relies on network effects: we rely in part on a growing audience of paying users to attract more content from contributors, thereby increasing our content selection and in turn attracting additional paying customers. For example, our global strategy relies on enabling easier global access in order to attract new contributions of local content, in turn attracting more paying customers who have preferences for local content. Any decrease in the attractiveness of our platform relative to other options available to our customers and contributors could lead to decreased engagement on our platform and unfavorably impact the network effects of our platform, which could result in loss of revenue. Users may engage in off-platform transactions, such as using Gen-AI content.

If we arecannot unableconvince users to growcontinue to use our customer and contributor base,platform, or retain our existing contributors and paying customers, or are unable to attract paying customers in a cost-effective manner, our financial performance, operating results and business may be adversely affected.

The industry in which we operate is intensely competitive and rapidly evolving, with low barriers to entry. We compete with a wide and diverse array of companies, from significant media companies to newly emerging generative artificial intelligence (“AI”) technologies to individual content creators. Our current and potential domestic and international competitors range from large established companies to emerging start-ups across different industries, including online marketplace and traditional stock content suppliers of current and archival creative and editorial imagery, photography, footage, and music; specialized visual content companies in specific geographic segments; providers of commercially licensable music; websites specializing in image search, recognition, discovery and consumption; websites that host and store images, art and other related products; providers of free images, photography, music, footage and related tools (including offerings by our partners); social networking and social media services; and commissioned photographers and photography agencies.

While we believe that there are obstacles to creating a meaningful network effect between customers and contributors, the barriers to creating a platform that allows for the licensing of content or provides workflow tools are low. If competitors offer higher royalties or more favorable royalty earning potential, easier submission workflows, or less rigorous vetting processes or incentivize contributors to distribute their content on an exclusive basis, contributors may choose to stop distributing new content with us or remove their existing content from our collection. Further, as technology advancesadvances, including AI and generative AI technologies, or other market dynamics make creating, sourcing, archiving, indexing, reviewing, searching or delivering content easier or more affordable, our existing and potential competitors may also seek to develop new products, technologies or capabilities that could render many of the products, services and content types that we offer obsolete or less competitive. For any of these reasons, we may not be able to compete successfully against our current and future competitors.

In addition, demand for our products and services is sensitive to price. Many external factors, including our technology and personnel costs and our competitors’ pricing and marketing strategies, could significantly impact our pricing strategies and we could fail to meet our customers’ pricing expectations. Increased competition and pricing pressures may result in downward pressure on pricing and reduced sales, lower margins, losses or the failure of our product and services to maintain and grow their current market share, any of which could harm our business.

Issues relating to the development and use of newAI, andincluding evolving technologies, such asgenerative AI, in our offerings couldmay adverselyresult affectin ourreputational businessharm, liability and operatingadverse financial results.

Issues relating to the use of new and evolving technologies such as AI in our offerings may result in brand or reputational harm, competitive harm, legal liability, or new or enhanced governmental or regulatory scrutiny, and may cause us to incur additional costs to resolve such issues. We are increasingly building AI into many of our offerings. As with many innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. For example, developing, testing and deploying third-party AI systems may increase the cost profile of our product offerings due to the nature of the computing costs involved in such systems, which could impact our margins and adversely affect our business and operating results. Our business may be disrupted if any of the third-party AI services we use become unavailable due to extended outages or interruptions or because they are no longer available on commercially reasonable terms or prices. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts. If we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm or legal liability. Potential litigation or government regulation related to AI may also increase the burden and cost of research and development in this area, subjecting us to brand or reputational harm, competitive harm or legal liability. Failure to address perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI by us or others in our industry could undermine public confidence in AI, which could slow our customers’ adoption of our products and services that use AI.

The future profitability of our business depends in part on our continued ability to grow our revenues. In the last several years, while revenue from our organic Content business has declined, our total reported consolidated revenues have grown as a result of Content business acquisitions and growth in our Data, Distribution and Services business. In future periods, our revenue could grow more slowly than in recent periods or further decline for many reasons, including any increase in competition, reduction in demand for our products, inability to introduce new products or enhance our existing product offerings, pricing pressures, contraction of our overall market or our failure to capitalize on growth opportunities. A significant decrease in our historical rate of growth may adversely impact our results of operations and financial condition. If our growth rate declines further, investors’ perceptions of our business may be adversely affected, and the trading price of our common stock could decline.

We have continued to grow in recent periods and if we fail to effectively manage ourthis growth, our business and operating results may suffer.

In the last several years, wewhile revenue from our organic Content business has declined, our total reported consolidated revenues have continuedgrown toas experiencea revenueresult growthof Content business acquisitions and may continue to experience such growth in the future. For example, our revenuesData, increased from $827.8 million in 2022 to $874.6 million in 2023Distribution and toServices $935.3business. million in 2024. Our continuedThis growth has placed significant demands on our management and our administrative, operational and financial infrastructure, and our success will depend in part on our ability to manage this growth efficiently. Specifically, as our operations have grown in size, scope and complexity, we have made and expect to continue to make significant expenditures and allocate valuable management resources to improve and upgrade our technology, customer service, sales and marketing infrastructure and product offerings, including new product offerings, and to continue developing or acquiring new and relevant content and product offerings. GrowthThis growth may also strain our ability to maintain reliable operation of our platform, enhance our operational, financial and management controls and reporting systems and recruit, train and retain highly skilled personnel. If we fail to effectively allocate our limited resources within our organization as it grows and do not successfully implement improved technology and infrastructure, our business, operating results and financial condition may suffer.

Although cybersecurity and the continued development and enhancement of the processes, practices and controls that are designed to protect our systems, computers, software, data and networks from attack, damage, disruption or unauthorized access are a high priority for us, because the techniques used to attack, damage, disrupt or obtain unauthorized access are constantly evolving in sophisticated ways to avoid detectiondetection, including through the use of emerging technologies, such as AI and machine learning, and often are not recognized until launched against a target, our efforts may not be enough to anticipate or prevent a party from circumventing our security measures, or the security measures of our third-party service providers, and accessing and misusing the confidential or personal information of our employees, customers and contributors and / or our networks. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose users and customers. We may also be required to expend significant capital and other resources to protect against such cybersecurity incidents to alleviate problems caused by such incidents. While we continually work to safeguard our internal network systems and validate the security of our third-party providers, to mitigate these potential risks, including through information security policies and employee awareness and training, there is no assurance that such actions will be sufficient to prevent cyber-attacks or cybersecurity breaches. Any actual or perceived breach or the perceived threat of an attack or breach, could cause our customers, contributors and other third parties to cease doing business with us, or subject us to lawsuits, regulatory fines, criminal penalties, statutory damages, and other costs, including for provision of breach notices and credit monitoring to our customers, and other action or liability, and could lead to business interruption, any of which could harm our reputation, business, financial condition, results of operations and stock price.

Government regulation of the internet, both in the United States and abroad, is evolving and unfavorablewe changeshave previously been and may in the future become subject to regulatory inquiries, investigations and other actions, which could have a negative impact on our business.

The adoption, modification or interpretation of laws or regulations relating to the internet, e-commerce or other areas of our business could adversely affect how we conduct our business or the overall popularity and growth of internet use. Such laws and regulations may cover a vast array of activities. For example, automatic contract or subscription renewal, credit card fraud and processing, sales, advertising, taxation, tariffs, data privacy, management and storage, cybersecurity, pricing, content, copyrights, distribution, electronic contracts, consumer protection, outsourcing, broadband residential internet access, internet neutrality and the characteristics and quality of products or services, and intellectual property ownership and infringement are all subject to jurisdictional laws and regulations. In certainthe countries,United States, our operations are subject to federal and state consumer protection laws, including Europeanthe jurisdictionsFederal Trade Commission Act (“FTC Act”) and the Restore Online Shoppers’ Confidence Act (“ROSCA”). We are currently under investigation by the FTC regarding our disclosure and subscription enrollment and cancellation practices under Section 5 of the FTC Act and the ROSCA. We have cooperated throughout the investigation, and in particular,January certain2026 the FTC entered into discussions with us to resolve this matter. If we cannot resolve this matter, the FTC would refer the case to the Department of theseJustice laws(the may“DOJ”) beto morefile restrictivea thancivil complaint against us in the United States.States ItDistrict isCourt notfor clearthe howSouthern someDistrict existingof lawsNew governingYork issuesseeking suchinjunctive asrelief, propertymonetary ownership,relief, salescivil penalties, and other taxes,relief. dataThe privacydefense or resolution of this matter could involve significant monetary costs or penalties and securityhave applya significant impact on our financial results and operations. There can be no assurance that we will be successful in reaching a favorable resolution of this matter. Any costs, penalties, remedies or compliance requirements could adversely affect our ability to theoperate internetour andbusiness e-commerceor ashave manya ofmaterially theseadverse lawsimpact wereon adoptedour priorfinancial toresults. theFor adventfurther information, see Note 18 of the internetNotes andto doConsolidated notFinancial contemplateStatements orincluded addressin thePart uniqueII, issuesItem raised8 byof thethis internetAnnual orReport e-commerce.on Form 10-K.

Those laws that relate to the internet are at various stages of development and are subject to amendment, interpretation or repeal by the courts and agencies, and thus, the scope and reach of their applicability can be uncertain. For example, in 2010, California’s Automatic Renewal Law went into effect, requiring companies to adhere to enhanced disclosure requirements when entering into automatically renewing contracts with consumers. Several other states have adopted, or are considering the adoption of, consumer protection policies or legal precedents that purport to void or substantially limit the automatic renewal provisions of consumer contracts or free or discounted trial incentives, as well. Any proceedings, actions, claims, investigations or inquiries initiated by or against us, whether successful or not, or any failure, or perceived failure, by us to comply with any of these laws or regulations could result in litigation, damage to our reputation, lost business and proceedings or actions against us by governmental entities or others, which could impactresult in damage awards, consent decrees, injunctive relief or increased costs of business, require us to change our business practices or products, or otherwise harm our business and operating results.

Currently, our stockholders have the right to vote in the election of our board and the power to approve or reject any matters requiring stockholder approval under Delaware law and our certificate of incorporation and bylaws. Upon completion of the merger, each of our stockholders who receives shares of Getty Images common stock will become a stockholder of Getty Images with a percentage ownership of Getty Images that is smaller than the their current percentage ownership of us. ItBased on the fully diluted number of shares of Getty Images common stock and Shutterstock common stock as of January 6, 2025, the last trading day before public announcement of the Merger, it is expected that Getty Images stockholders will hold approximately 54.7%, and our stockholders will hold approximately 45.3%, of the fully diluted shares of the combined company immediately after the merger, without giving effect to any shares of Getty Images common stock held by our stockholders prior to the completion of the merger.

Each holder of shares of Shutterstock common stock immediately prior to the transaction close will have the option to receive, subject to proration, for each share of Shutterstock common stock held by such holder:

A majority of Shutterstock stockholders approved the adoption of the Merger Agreement at a special meeting of stockholders held on June 10, 2025 (the “Shutterstock Stockholder Approval”). The Merger is subject to the satisfaction of customary closing conditions, further described below, including receipt of required regulatory approvals, the approval of Getty Images and Shutterstock stockholders and the extension or refinancing of Getty Images’ existing debt obligations.approvals. Subject to the satisfaction of the closing conditions, upon closing of the Merger, Shutterstock’s common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended. The closing of the Merger is subject to the satisfaction or waiver of certain closing conditions, including:

•adoption of the Merger Agreement by Shutterstock stockholders (the “Shutterstock Stockholder Approval”)Approval, which condition was subsequently satisfied as described above, and the Getty Images Stockholderstockholder Approval,approval, which condition was subsequently satisfied by the Getty Images Stockholderstockholder Writtenwritten Consent,consent;

•Getty Images’ registration statement on Form S-4 to be filed in connection with the Merger having become effective and the mailing of an information statement to Getty Images stockholders at least 20 business days prior to the closing, which condition was subsequently satisfied on April 30, 2025;

•absence of any order, injunction or other order or law in certain jurisdictions prohibiting the Merger or making the closing of the Merger illegal,illegal;

•shares of Getty Images Commoncommon Stockstock to be issued in connection with the Merger having been approved for listing on the NYSE,NYSE;

•accuracy of each party’s representations and warranties, subject to certain standards set forth in the Merger Agreement,Agreement;

•performance and compliance in all material respects of each party’s agreements and covenants under the Merger Agreement,Agreement;

•absence of any Getty Images material adverse effect or Shutterstock material adverse effect, as applicable and subject to the definitiondefinitions thereof in the Merger Agreement,Agreement;

•delivery of an opinion of tax counsel that the Second Merger and the Third Merger as defined in the Merger Agreement, taken together, will qualify as a “reorganization” within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended,amended; and

•Getty Images having amended or otherwise refinanced its existing term loans and senior notes to extend the maturity of each to no earlier than February 19, 20282028. (On September 18, 2025, the “ExistingCompany Debtand Modifications”).Getty Images agreed to waive this condition such that it is no longer a condition to the Merger.

Our Content is distributed to customers under the following brands: Shutterstock; Pond5; TurboSquid; PicMonkey; PremiumBeat; Splash News; Bigstock; Envato;and Envato. Shutterstock, our flagship brand, includes various content types such as image, footage, music and Offset.editorial.

Pond5 is a video-first content marketplace which expands the Company’s content offerings across footage, image and music. TurboSquid operates a marketplace that offers more than one million 3D models and a 2 dimensional (“2D”) marketplace derived from 3D objects. PicMonkey is a leading online graphic design and image editing platform. PremiumBeat offers exclusive high-quality music tracks and provides producers, filmmakers and marketers the ability to search handpicked production music from the world’s leading composers. Splash News provides editorial image and video content across celebrity and red carpet events. Bigstock maintains a separate content library tailored for creators seeking to incorporate cost-effective imagery into their projects. OurEnvato Offsetenhances branddigital providescreative authenticassets and exceptional content for high-impact use cases that require extraordinary images, featuring work from top assignment photographers and illustrators from around the world.templates.

Subscribers, subscriber revenue and average revenue per customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, from Backgrid beginning February 2025, and for Average Revenue per Customer, from Giphy beginning July 2024. These2025 metrics excludeinclude the respective counts and revenues from BackgridEnvato, andwhich Envato.was acquired in July 22, 2024.

1 Represents Shutterstock, Inc. key operating metrics before combining the Envato related metrics. Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, andBackgrid beginning February 2025, and, for Average Revenue per Customer, from Giphy beginning July 2024. These2025 metrics excludeinclude the respective counts and revenues from ourEnvato, acquisitionswhich ofwas Backgridacquired andin Envato.July 22, 2024.

2 Envato Subscribers and Subscriber Revenue are presented as if Envato was acquired as of the beginning of the period presented, and represent metrics incremental to amounts presented under the “Shutterstock, Inc.” heading. Envatopresented. Average revenue per customer is derived fromincludes Envato historical results over the last twelve months.month period.

Other Income / (Expense),Income, Net. Other income / (expense),income, net consists of non-operating costs such as foreign currency transaction gains and losses, in addition to unrealized gains and losses on investments and interest income and expense.

Revenue increased by $60.7 million, or 7%, to $935.3 million in 2024 as compared to 2023. Foreign currency fluctuations did not have a significant impact on our revenue in the year ended December 31, 2024.2024, as compared to 2023.

Our Content revenues increased by 3%, to $760.0 million in 2024,2024 as compared to 2023. Foreign currency fluctuations did not have a significant impact on our Content license revenuesrevenue in 2024. The increase in our Content license revenues was driven by revenue from Envato, which was acquired on July 22, 2024.

Changes in our revenue by region were as follows: revenue from North America increased by $46.9 million, or 11%, to $474.7 million;million, revenue from Europe increased by $14.6 million, or 6%, to $245.7 million; and revenue from outside Europe and North America remained relatively flat, decreasing by $0.9 million to $214.9 million, in the year ended December 31, 2024 compared to 2023.

Sales and Marketing. Sales and marketing expenses increased by $8.0 million, or 4%, to $222.7 million in 2024 as compared to 2023. As a percent of revenue, sales and marketing expenses decreased to 24% for the year ended December 31, 2024, from 25% for the same period in 2023.This2023. This increase was driven by increases in employee-related costs, occupancy expenses, and other administrative expenses, partially offset by a decline in performance marketing spend and consulting expenses. In addition, there were $4.3 million and $0.6 million increases from recurring and non-recurring Giphy Retention Compensation, respectively. We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.

Interest Expense. In the twelve months ended December 31, 2024 and December 31, 2023, we recognized interest expense of $10.6 million and $1.9 million, respectively related to our credit facility and the amortization of deferred financing fees. Interest expense for the twelve months ended December 31, 2024 increased due to borrowings under the A&R Credit Agreement entered into during the quarter ended September 30, 2024 to fund the acquisition of Envato.

The 2023 effective tax rate differs from the U.S. federal statutory tax rate primarily due to the non-taxable bargain purchase gain associated with the acquisition of Giphy, the effect of the U.S. Research and Development (“R&D”) tax creditcredit, and the foreign-derived intangible income deduction.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Form 10-K, which could materially affect our business, financial condition or future results. During the three months ended MarchJune 31,30, 2026, there were no material changes to these risk factors as described in our 2025 Form 10-K.

On January 6, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to combine in a merger-of-equals transaction with Getty Images Holdings, Inc. (NYSE:GETY) (“Getty Images”) (such transaction referred to herein as the “Merger”). Subject to terms and conditions in the Merger Agreement, the aggregate consideration to be paid by Getty Images in respect of the outstanding shares of common stock of Shutterstock will be:

Subscribers, subscriber revenue and average revenue per customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato for the three and six months ended MarchJune 31,30, 2025, which was acquired in July 22, 2024.

The following tables summarize our key operating metrics, which are unaudited, for the three and six months ended MarchJune 31,30, 2026 and 2025:

1 Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination. Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato, which was acquired in July 22, 2024.

See Note 3 to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of the impact of the adoption of any new accounting standards on our financial statements. There have been no material changes to our critical accounting estimates as compared to our critical accounting policies and estimates included in our 2025 Form 10-K.

The Company’s revenues by distribution channel for the three and six months ended MarchJune 31,30, 2026 and 2025 are as follows (in thousands):

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue decreased by $43.5$45.2 million, or 18%,17%, to $199.2$221.8 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. On a constant currency basis, revenue decreased by 19%17% in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025.

Our Content revenues decreased by 12%,17%, to $178.1$165.7 million in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. On a constant currency basis, content revenue decreased by 14%16% in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. During the three months ended MarchJune 31,30, 2026, the reduction in our Content revenue was driven primarily by weakness in new customer acquisition.

Our Data, Distribution, and Services revenues decreased by 47%,16%, to $21.0$56.1 million in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. On a constant currency basis, Data, Distribution, and Services revenues weredecreased notby impacted on a constant currency basis19% in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. The decrease in Data, Distribution, and Services revenues was primarily driven by a decline in our data offering, which decreased by 63%11% in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. Revenue recognition in our data offering may vary from quarter-to-quarter based on the delivery timing of metadata licenses.

Changes in our revenue by region were as follows: revenue from North America decreased by $31.2$29.8 million, or 26%,20%, to $89.0$118.1 million, revenue from Europe decreased by $3.5$5.2 million, or 5%,8%, to $62.7$59.2 million and revenue from outside Europe and North America decreased by $8.8$10.2 million, or 16%,19%, to $47.4$44.5 million, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025.

Cost of Revenue. Cost of revenue decreased by $6.1$12.2 million to $94.8$93.8 million in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. This decrease is primarily due to lower royalty expenses as a result of the decline in revenue for the quarter. As a percentage of revenue, cost of revenue increased to 48%42% for the three months ended MarchJune 31,30, 2026, from 42%40% for the same period in 2025, and this increase relaterelated to AI token usage fees and website hosting costs which do not fluctuate with revenue. We expect that our cost of revenue will continue to fluctuate in-line with changes in revenue.

Sales and Marketing. Sales and marketing expenses decreased by $5.0$9.1 million, or 9%,16%, to $48.3$48.0 million in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. This was driven by a decrease in brand and performance-based marketing expenses. As a percentage of revenue, sales and marketing expenses increased to 24%22% for the three months ended MarchJune 31,30, 2026, from 22%21% for the same period in 2025. We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.

Product Development. Product development expenses decreased by $0.5$3.2 million to $19.4$17.6 million in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The decrease in product development was driven by a decrease in employee-related costs.costs Thisand was partially offset by increasesdecreases in software licenses and third-party contractor related costs, net of capitalized labor. We expect product development expenses, of which a portion will be capitalized, to continue in the foreseeable future, as we pursue opportunities to invest in developing new products and internal tools and enhance the functionality of our existing products and technologies.

General and Administrative. General and administrative expenses increaseddecreased by $9.3$4.5 millionmillion, to $67.6$43.9 millionmillion, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. ThisThe increasedecrease was driven by increasesdecreases in legalemployee-related contingencies of $28.0 million (see Item 1 of Part I, “Financial Statements — Note 15 — Commitments and Contingencies — Legal Matters” for more information)costs, offset by a$3.7 decreasemillion inof employee-relatedexpenses expenses.associated with the Merger.

Interest Expense. In the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, we recognized interest expense of $3.8 million and $4.3$4.2 million, respectively, related to our credit facility and the amortization of deferred financing fees. Interest expense for the three months ended MarchJune 31,30, 2026 decreased due to lower interest rates in the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025.

Other (Expense) / Income, Net. In the three months ended MarchJune 31,30, 2026, other (expense) / income, net was driven by $15.3$3.0 million of unrealized losses related to our investment in Meitu, Inc. In addition, other income, net had $0.8$0.5 million of interest income and $0.2$0.6 million of unrealized foreign currency losses. In the three months ended MarchJune 31,30, 2025, other income, net was primarily driven by $13.3$18.0 million of unrealized gains related to our investment in Meitu, Inc. In addition, other income, net had $0.9$1.1 million of interest income and $0.3$1.5 million of unrealized foreign currency gains. As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.

Income Taxes. The income tax expense decreased by $3.5$18.7 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Our effective tax rates were a net benefit of 3.7%3.1% and 8.5%an expense of 31.7% for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

For the three months ended MarchJune 31,30, 2025,2026, the net effect of discrete items decreased the effective tax rate by 19.6%.45.3%. The discrete items for the three months ended MarchJune 31,30, 20252026 primarily relate to decreasesthe book goodwill impairment which is non-deductible for the UK valuation and tax reservepurposes, releases.partially offset by shortfalls on equity award vestings. Excluding discrete items, our effective tax rate would have been 28.1%48.4% for the three months ended MarchJune 31,30, 2025.2026.