Shutterstock, Inc.SSTK
Shutterstock, Inc. Income Taxes Disclosure
Income Taxes
The Company’s geographical breakdown of its income before income taxes is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 30,029 | $ | 49,827 | $ | 108,013 | |||||||||||
| Foreign | 45,302 | 12,721 | 14,455 | ||||||||||||||
| Income before income taxes | $ | 75,331 | $ | 62,548 | $ | 122,468 | |||||||||||
The following table summarizes the consolidated provision for income taxes (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision: | |||||||||||||||||
| Federal | $ | 6,602 | $ | 18,578 | $ | 24,015 | |||||||||||
| State and local | (137) | 5,245 | 5,392 | ||||||||||||||
| Foreign | 15,802 | 13,756 | 8,967 | ||||||||||||||
| Deferred provision (benefit): | |||||||||||||||||
| Federal | 12,060 | (28,582) | (24,880) | ||||||||||||||
| State and local | 348 | (2,824) | (1,047) | ||||||||||||||
| Foreign | (4,840) | 20,443 | (248) | ||||||||||||||
| Provision for income taxes | $ | 29,835 | $ | 26,616 | $ | 12,199 | |||||||||||
The provision for income taxes differs from statutory income tax rate as follows:
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||||||||||||||||
| Income before income taxes | $ | 75,331 | $ | 62,548 | $ | 122,468 | ||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | 15,828 | 21.0 | % | 13,132 | 21.0 | % | 25,719 | 21.0 | % | |||||||||||||||||||||||
| Domestic Federal Tax Effects | ||||||||||||||||||||||||||||||||
| Tax Credits | ||||||||||||||||||||||||||||||||
| Research credits | (310) | (0.4) | (5,898) | (9.4) | (4,889) | (4.0) | ||||||||||||||||||||||||||
| Withholding taxes | (4,679) | (6.2) | (3,995) | (6.4) | (3,789) | (3.1) | ||||||||||||||||||||||||||
| Nontaxable and Non-deductible Items | ||||||||||||||||||||||||||||||||
| Equity-based compensation | 3,104 | 4.1 | 4,204 | 6.7 | 3,170 | 2.6 | ||||||||||||||||||||||||||
| Bargain purchase gain | — | — | — | — | (10,555) | (8.6) | ||||||||||||||||||||||||||
| Transaction costs | — | — | 1,399 | 2.2 | 334 | 0.3 | ||||||||||||||||||||||||||
| Cross-border Tax Laws | ||||||||||||||||||||||||||||||||
| GILTI | 2,717 | 3.6 | — | — | 4 | — | ||||||||||||||||||||||||||
| BEAT | 8,113 | 10.8 | — | — | — | — | ||||||||||||||||||||||||||
| FDII | (362) | (0.5) | (5,339) | (8.5) | (7,889) | (6.4) | ||||||||||||||||||||||||||
| US taxation of foreign disregarded entity | 294 | 0.4 | 995 | 1.6 | 319 | 0.3 | ||||||||||||||||||||||||||
| Other | 16 | — | 188 | 0.3 | (138) | (0.1) | ||||||||||||||||||||||||||
| Shortfall tax expense on share-based payments | 4,368 | 5.8 | 2,431 | 3.9 | 576 | 0.5 | ||||||||||||||||||||||||||
| Equity-based compensation award expiration | — | — | 6,354 | 10.2 | — | — | ||||||||||||||||||||||||||
| Changes in Valuation Allowance | 1,001 | 1.3 | — | — | — | — | ||||||||||||||||||||||||||
| Domestic state and local income taxes, net of federal effect | 1,859 | 2.5 | 1,825 | 2.9 | 2,672 | 2.2 | ||||||||||||||||||||||||||
| Foreign Tax Effects | ||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||
| Statutory income tax rate differential | 751 | 1.0 | (26) | — | (182) | (0.1) | ||||||||||||||||||||||||||
| Changes in Valuation Allowance | (3,839) | (5.1) | 1,328 | 2.1 | 1,621 | 1.3 | ||||||||||||||||||||||||||
| Other | (214) | (0.3) | — | — | 93 | 0.1 | ||||||||||||||||||||||||||
| Ireland | ||||||||||||||||||||||||||||||||
| Statutory income tax rate differential | (754) | (1.0) | (1,198) | (1.9) | (998) | (0.8) | ||||||||||||||||||||||||||
| Other | 483 | 0.6 | (41) | (0.1) | 248 | 0.2 | ||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||
| Statutory income tax rate differential | 538 | 0.7 | (516) | (0.8) | 7 | — | ||||||||||||||||||||||||||
| Foreign rate differential on acquired intangibles | (1,911) | (2.5) | 5,454 | 8.7 | — | — | ||||||||||||||||||||||||||
| Other | (147) | (0.2) | 662 | 1.1 | (79) | (0.1) | ||||||||||||||||||||||||||
| Canada | 531 | 0.7 | 960 | 1.5 | 825 | 0.7 | ||||||||||||||||||||||||||
| Other Foreign Jurisdictions | 726 | 1.0 | 461 | 0.7 | 199 | 0.2 | ||||||||||||||||||||||||||
| Withholding taxes | 4,691 | 6.2 | 5,572 | 8.9 | 3,806 | 3.1 | ||||||||||||||||||||||||||
| Worldwide changes in unrecognized tax benefits | (2,969) | (3.9) | (1,336) | (2.1) | 1,125 | 0.9 | ||||||||||||||||||||||||||
| Effective Tax Rate | 29,835 | 39.6 | 26,616 | 42.6 | 12,199 | 10.0 | ||||||||||||||||||||||||||
The income taxes paid by the Company are as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Federal | 9,056 | 16,072 | 22,400 | |||||||||||||||||
| State | 3,702 | 5,171 | 6,517 | |||||||||||||||||
| Foreign | 7,404 | 12,790 | 4,150 | |||||||||||||||||
| Total | 20,162 | 34,033 | 33,067 | |||||||||||||||||
From the above amounts, income taxes paid (net of refunds) exceeds 5% of taxes paid in the following jurisdictions:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Foreign | ||||||||||||||||||||
| Canada | 3,663 | 2,693 | 3,715 | |||||||||||||||||
| Ireland | 1,343 | 4,373 | * below 5% | |||||||||||||||||
| Australia | * below 5% | 4,672 | * below 5% | |||||||||||||||||
| State | ||||||||||||||||||||
| California | * below 5% | 2,201 | 2,371 | |||||||||||||||||
| New York | 1,068 | * below 5% | * below 5% | |||||||||||||||||
The tax effect of the Company’s temporary differences that give rise to deferred tax assets and liabilities are presented below (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Non-cash equity-based compensation | $ | 13,598 | $ | 10,492 | |||||||
| Intangible amortization | 5,836 | 31,263 | |||||||||
| Accruals and reserves | 27,402 | 15,106 | |||||||||
| Lease liabilities | 5,443 | 7,050 | |||||||||
| Net operating losses | 19,569 | 18,003 | |||||||||
| Other | 4,661 | 1,496 | |||||||||
| Gross deferred tax assets | 76,509 | 83,410 | |||||||||
| Valuation allowance | (6,517) | (8,761) | |||||||||
| Net deferred tax assets | 69,992 | 74,649 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Right-of-use assets | (1,682) | (2,502) | |||||||||
| Depreciation and amortization | (1,918) | (2,680) | |||||||||
| Contingent consideration | (6,237) | (659) | |||||||||
| Net deferred tax assets | $ | 60,155 | $ | 68,808 | |||||||
In addition, the valuation allowance of $4.8 million relates to certain foreign net operating loss carryforwards, and $1.7 million relates to certain US Federal and State tax attributes, where the Company has determined that there is sufficient uncertainty regarding the future realization of these net operating losses.
The following table summarizes changes to the Company’s unrecognized tax benefits as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance of unrecognized tax benefits at January 1 | $ | 12,296 | $ | 13,516 | $ | 13,021 | |||||||||||
| Gross additions for tax positions for prior years | 312 | 2,408 | 399 | ||||||||||||||
| Gross additions for tax positions for current year | 204 | 3,355 | 1,054 | ||||||||||||||
| Gross reductions for tax positions of prior years | — | (6,983) | (958) | ||||||||||||||
| Gross expirations | (3,708) | — | — | ||||||||||||||
| Balance of unrecognized tax benefits at December 31 | $ | 9,104 | $ | 12,296 | $ | 13,516 | |||||||||||
The total amount of unrecognized tax benefits as of December 31, 2025 was $8.8 million, which, if recognized, would impact the Company’s effective tax rate in future periods. Unrecognized tax benefits is included within prepaid expenses and other current assets and other non-current liabilities on the Consolidated Balance Sheets. The Company has determined that it is reasonably possible that there will be a reversal of unrecognized tax benefits by as much as $1.1 million in the next fiscal year due to the expected resolution of prior year tax matters.
The Company recognizes interest expense and tax penalties related to unrecognized tax benefits as a component of income tax expense in the Consolidated Statements of Operations. Interest and penalties included in the Company’s provision for income taxes were not material in all the periods presented.
The Company and its subsidiaries file income tax returns in the U.S. and various foreign jurisdictions. During the tax year ending December 31, 2024 the U.S. Internal Revenue Service closed the audit for tax years 2017 through 2021 with $0.9 million of additional tax and interest assessed. During the tax year ending December 31, 2025 the state of California closed the audit for tax years 2021 and 2022 with no changes. The Company is currently under examination by the state of New York for the tax years 2022 and 2023. The Company is no longer subject to U.S. federal, state, local and foreign tax examinations by tax authorities for years before 2020.
As of December 31, 2025, the Company has $80.7 million in tax net operating loss carryforwards in U.S. and foreign tax jurisdictions which are available to reduce future income taxes and the majority of this amount relates to jurisdictions with an indefinite carryforward period.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 24, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.