Strategic Performance and Market Positioning
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Delivered record full-year revenue of $981.3 million, representing 4.5% growth driven by strength in creative and editorial segments despite market volatility.
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Secured two landmark multi-year licensing agreements with a major social platform and a large AI company, validating the high demand for premium pre-shot and editorial content in emerging tech ecosystems.
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Attributed Q4 outperformance to $40 million in accelerated revenue from these strategic deals, which also establish long-term recurring revenue streams.
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Strengthened the recurring revenue base with annual subscriptions now exceeding 54% of total revenue, supported by a 30% growth in Unsplash Plus subscribers.
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Maintained a competitive edge through exclusive editorial coverage, exemplified by the Milano Cortina 2026 Winter Games where proprietary technology delivered images to customers faster than live broadcasts.
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Navigated a challenging agency environment, which declined 16% in Q4, by pivoting toward growth in corporate and media sectors.
2026 Outlook and Strategic Assumptions
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Anticipates 2026 revenue between $948 million and $988 million, reflecting a year-over-year decline due to the difficult comparison created by 2025's accelerated revenue recognition.
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Excluding the $40 million one-time impact from 2025 deals, the core business is projected to grow between 0.7% and 4.9% in 2026.
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Expects adjusted EBITDA of $279 million to $295 million, assuming a $3.6 million currency tailwind based on specific Euro and GBP exchange rate targets.
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Projects a future revenue stream of $20 million in 2026 specifically from the downstream components of the two major licensing deals signed in late 2025.
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Assumes continued investment in machine learning to extend natural language search capabilities from the creative library into the editorial offering to drive customer retention.
Regulatory Updates and Operational Risks
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Extended the Shutterstock merger timeline to June 2026 following the UK CMA's decision to prolong its Phase 2 review focused on the UK editorial market.
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Offered specific remedies to the CMA to address competition concerns, though management maintains the transaction will ultimately benefit UK customers.
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Incurred $9.9 million in full-year fees related to ongoing AI litigation and $7.8 million for accelerated SOX compliance efforts.
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Identified a decline in active annual subscribers to 278,000, primarily due to the June 2025 discontinuation of the iStock free trial customer acquisition program.
Q&A Session Highlights
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Strategic rationale and future pipeline for large-scale licensing deals
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Management emphasized that the deals reflect the essential nature of high-quality content for social media display and large language model (LLM) integration.
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Confirmed a strong pipeline for similar deals exists, though they aim to avoid the extreme revenue acceleration 'gyrations' seen in the Q4 2025 reporting.
Drivers behind the decline in annual subscriber retention rates
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Attributed the dip to 89.9% to a lack of major one-time events compared to 2024, which reduced 'à la carte' spending by existing subscribers.
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Expressed confidence that retention will return to the low-to-mid 90s range once the company laps the anniversary of ending its free trial program in mid-2026.
Policy on licensing editorial content for AI training purposes
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Management explicitly stated they do not license editorial content for AI training to protect the likeness and IP of subjects, despite creative content being available for such uses.
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Acknowledged that while they do not authorize it, their editorial content is frequently scraped by AI entities from third-party sites across the internet.
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