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 Felenstein. You may begin.

Thank you, operator. Good morning, everyone. And thank you for joining us for Shutterstock's second quarter 2016 earnings call. Joining me today is Jon Oringer, our Founder, Chief Executive Officer, and Chairman; and Steven Berns, 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 relating 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-K 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, which 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. With all that out of the way, I'll turn the call over to Jon. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Thanks, Craig. Thank…

Our first question comes from Ralph Schackart of William Blair. Your line is open. Ralph E. Schackart - William Blair & Co. LLC: Good morning. A couple questions, if I could, maybe I'll start off with Jon 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 were able to add the most amount of first-time users this quarter than ever before? Jonathan Oringer - Founder, Chairman & Chief Executive Officer: 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. Steven Berns - Chief Financial Officer & Treasurer: 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 two exceptions. And those two exceptions are one, 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 the U.S. dollar. So we're seeing really a…

Next question, operator?

Our next question comes from Youssef Squali of Cantor Fitzgerald. Your line is open.

Yes, thank you very much. Jon, 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 two years or three years we've gone from mid-30%s 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 one. And two, on the re-platforming, 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 re-platforming, particularly on the P&L? Thank you. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Yeah. I will start, and then Steven will jump in. I think the re-platform 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 our 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. Steven Berns - Chief Financial Officer & Treasurer: 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 2016 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 a better, faster, more valuable to them and their clients. And so, everything we are 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 and 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.

No, no you go ahead. Steven Berns - Chief Financial Officer & Treasurer: I was just going to say, as it relates to the management question, Jon, do you want to? Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Yeah. I am happy to address that. We are focused on having the right people at the right time in the organization to build what we need to build. Look 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 will find the right one. Steven Berns - Chief Financial Officer & Treasurer: 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 am sorry, retain our people. And it's really – the last thing I'd say is, we are growing at a rapid rate. We are energetic about where we are headed. And we – going from $500 million 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 are not necessarily up for that and that's all well and good. We think the other thing is to say that we have 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 in 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, Steven. If I look at your CapEx, it looks like you've taken your CapEx from $25 million, at least guidance for 2016 from $25 million to $30 million to $35 million, is that related to re-platforming and if so, as we look at 2017 and beyond, is there a step down function from that for non-recurring expenditures? Thanks. Steven Berns - Chief Financial Officer & Treasurer: So as it relates to that question, the answer is yes, it is up slightly year-over-year, still an estimate, we treat all these things as zero-base and so as we go into 2017, we're going to certainly look at that from 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 tech re-platform as well as some content acquisition that we've done on both editorial as well as on the music side and then 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. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Next question, operator.

Our next question comes from Lloyd Walmsley of Deutsche Bank. Your line is open.

Hi. This is Aki Aggarwal 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. Steven Berns - Chief Financial Officer & Treasurer: So, as we look into 2016, 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 head count to take advantage of the opportunity. They are extremely productive today on our sales force. They take about nine months to ramp up, 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. 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 are competing against to submit these images? And the second one, you mentioned a bad debt reserve increase, Steven, does that have something to do with a change in customer base or can you just flesh that out a little bit? Thank you. Steven Berns - Chief Financial Officer & Treasurer: 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 are making more money. So we see no reason for that to vary and we think the competitive environment continues to drive towards the 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. Aaron M. Kessler - Raymond James & Associates, Inc.: 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 product it is for? It sounds like it might be a new offering from Google to bring kind of product listing ads to new categories? Second, can you just provide us maybe just an update on the revenue mix, where it currently stands between subscription, on-demand, as well as video, enterprise and music? Thank you. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: On Google, it's for their ad products, same as Facebook, it's for ad products 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. Steven Berns - Chief Financial Officer & Treasurer: Yeah, the specific terms of our arrangement with Google and really with any client, we don't discuss those, but to Jon'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 represent well over 10% on a combined basis. Enterprise is close to approximately 30%, which is up from the high 20%s earlier this year, and subscription represents about one-third of our revenue with on-demand between the 35% and 40% level. Aaron M. Kessler - Raymond James & Associates, Inc.: Great. Thanks so much. Steven Berns - Chief Financial Officer & Treasurer: Sure.

Our next question comes from Brian Fitzgerald of Jefferies. Your line is open.

Hi. This is John Streppa on for Brian. Thanks for taking my question. Maybe if you guys can 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. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Yeah, 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 are able to use this content. There's a lot of pressure on creative to become more animated with the 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 this is 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 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 on the contributors 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. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: 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're converting that at the current exchange rate and then paying that contributor in U.S. dollars.

Great. Thanks guys. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Sure. Time for one last question, operator.

Our next question comes from Blake Harper of Low Capital (38:47). Your line is open.

Hey, good morning guys. Most of my questions have been answered, but just wanted to ask about some of the mobile tools, I think you updated and launched some tools for the contributor side and then had some others for your customer side. But I just wanted to see if you're seeing any increase in engagement or traction with those there and kind of if you have any update as far as the – what you would think as far as mobile tools once you make the tech migration later this year? Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Yeah. Mobile is important for us. On the buyers side, it's still primarily the desktop where we see most of the usage for images. On the contributors side and also occasionally on the buyers side too, we see more and more usage through our iOS and our Android application. Both of the applications we continuously release new features on and reverse image search is actually something that's really important on the buyers side. We find that sometimes people will, that are creative, that our customers will see something that they like to use in one of their projects. 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.

Thanks. Jonathan Oringer - Founder, Chairman & Chief Executive Officer: 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, Jon, Jonathan Oringer - Founder, Chairman & Chief Executive Officer: Thank you for joining us today. If you have any follow-up questions, please let us know when you are 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.