Shutterstock (SSTK) risk factors, FY2024 10-K

Risks Related to the Proposed Merger with Getty Images (the “Merger”)

1. 01Failure to complete the Merger could trigger the payment of a termination fee, and, whether or not the Merger is consummated, we have incurred and will continue to incur significant costs, fees and expenses relating to professional services and transaction fees
2. 02Uncertainties associated with the Merger may cause us to lose key customers or suppliers and make it more difficult to retain and hire key personnel, and the Merger may disrupt our current plans and operations or divert management’s attention from our ongoing business
3. 03We will be subject to business uncertainties and contractual restrictions while the Merger is pending
4. 04The proposed Merger and the integration of both companies may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the Merger
5. 05The market price of the combined company’s common stock following the anticipated closing of the Merger may be affected by factors different from those that historically have affected or currently affect our common stock
6. 06We may be unable to retain personnel successfully while the Merger is pending or after the Merger is completed
7. 07We may become subject to lawsuits relating to the Merger, which could adversely affect our business, financial condition and operating results

Risks Related to Industry Dynamics and Competition

1. 08The 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
2. 09The 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
3. 10across these categories, or if our competitors innovate and provide products faster than we can, we may be unable to compete effectively and our business will be harmed
4. 11Our marketing efforts to acquire new, and retain existing customers may not be effective or cost-efficient, and may be affected by external factors beyond our control
5. 12If we cannot 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
6. 13Unless we increase market awareness of our brand and our existing and new products and services, our revenue may not continue to grow
7. 14In order to continue to attract large corporate customers, we 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
8. 15Expansion 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
9. 16The impact of worldwide economic, political and social conditions, including effects on advertising and marketing budgets, may adversely affect our business and operating results
10. 17Issues relating to the use of new and evolving technologies, such as AI, in our offerings could adversely affect our business and operating results

Risks Related to Operating our Business

1. 18We may not continue to grow our revenues at historical rates
2. 19If 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
3. 20We have continued to grow in recent periods and if we fail to effectively manage our growth, our business and operating results may suffer
4. 21If we do not successfully make, integrate and maintain acquisitions and investments, our business could be adversely impacted
5. 22We rely on highly skilled personnel and if we are unable to retain and motivate key personnel, attract qualified personnel, integrate new members of our management team or maintain our corporate culture, we may not be able to grow effectively
6. 23We may be exposed to risks related to our use of independent contractors
7. 24The non-payment or late payments of amounts due to us from certain customers may negatively impact our financial condition
8. 25We 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
9. 26If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings
10. 27We may need to raise additional capital in the future and may be unable to do so on acceptable terms or at all
11. 28We have incurred debt which could have a negative impact on our financing options and liquidity position, which could in turn adversely affect our business

Risks Related to our Intellectual Property and Security Vulnerabilities

1. 29We rely on information technologies and systems to operate our business and maintain our competitiveness, and any failures in our technology infrastructure could harm our reputation and brand and adversely affect our business
2. 30Technological interruptions that impair access to our web properties or the efficiency of our marketplace could harm our reputation and brand and adversely affect our business and results of operations
3. 31We face risks resulting from the content in our collection such as unforeseen costs related to infringement claims, potential liability arising from indemnification claims, changes to intellectual property content regulations and laws and the inability to prevent or monitor misuse
4. 32Assertions 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
5. 33Cybersecurity incidents and improper access to or disclosure of data or confidential information we maintain, or hacking or phishing attacks on our systems, could expose us to liability, protracted and costly litigation, business interruption, and damage our reputation
6. 34Failure to protect our intellectual property could substantially harm our business and operating results
7. 35Much of the software and technologies used to provide our services incorporate, or have been developed with, “open source” software, which may restrict how we use or distribute our services or require that we publicly release certain portions of our source code
8. 36Catastrophic 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

Risks Related to our International Operations

1. 37Our international operations and our continued expansion internationally expose us to many risks
2. 38We are subject to foreign exchange risk

Risks Related to Regulatory and Tax Challenges

1. 39Government regulation of the internet, both in the United States and abroad, is evolving and unfavorable changes could have a negative impact on our business
2. 40Action 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
3. 41Income 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
4. 42We 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
5. 43We continue to evaluate the impact, if any, of the imposition of sales tax on customer demand for our products and results of operations. Recent legislation has, and will continue to, significantly increase the effort, resources and costs associated with the collection and compliance burden for sales tax

Risks Related to Ownership of Our Common Stock

1. 44Our operating results may fluctuate, which could cause our results to fall short of expectations and our stock price to decline
2. 45Our revenue and operating results could vary significantly from quarter to quarter and year to year due to a variety of factors, many of which are outside our control. As a result, comparing our operating results on a period to period basis may not be meaningful
3. 46Our stock price has been and will likely continue to be volatile
4. 47The exchange ratio of the Merger consideration is fixed, and under the Merger Agreement there will be no adjustment to the Merger consideration for changes in the market price of Getty Images common stock or our common stock prior to the completion of the Merger
5. 48Our stockholders will have a reduced ownership and voting interest in Getty Images following the Merger as compared to their ownership and voting interest in us and will exercise less influence over management
6. 49Purchases 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
7. 50If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
8. 51Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for our stockholders to sell their common stock at a time and price that they deem appropriate
9. 52Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our Company and may affect the trading price of our common stock
10. 53There can be no assurance that we will declare dividends in the future
11. 54The reduction or elimination of our cash dividend program could adversely affect the market price of our common stock
12. 55We have incurred and expect to continue to incur increased costs and our management will continue to face increased demands as a result of continuously improving our operations as a public company