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Shutterfly, Inc. (SFLY)
Q3 2009 Earnings Call
October 28, 2009 5:00 pm ET
John Kale – Vice President, Finance
Jeffrey Housenbold – Chief Executive Officer
Mark Rubash – Chief Financial Officer
Kristine Koerber – JMP Securities
Imran Khan – J. P. Morgan
[Navid Khan] for Youssef Squali – Jefferies & Company
Mitchell Bartlett – Craig-Hallum Capital
Shawn Milne – Janney, Montgomery Scott
[Kevin Koppleman – Cowan & Company]
Michael Olson – Piper Jaffray
Previous Statements by SFLY
» Shutterfly, Inc. Q2 2009 Earnings Call Transcript
» Shutterfly Inc. Q1 2009 Earnings Call Transcript
» Shutterfly, Inc. Q4 2008 Earnings Call Transcript
Welcome to Shutterfly’s third quarter 2009 conference call. With us today are Jeff Housenbold, Chief Executive Officer of Shutterfly and Mark Rubash, Chief Financial Officer.
A press release detailing our results is available on Shutterfly.com and an archived copy will be kept on our site. We have also released some visuals as we go through the call. Additionally, within a few hours we will release a recording of this call both in a streaming online format and through a downloadable podcast. You can access all of these through the investor relations section of our website at Shutterfly.com.
Before we begin, I’d like to note that our discussions today will include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements include statements about our business outlook and strategy and statements about historical results that may suggest trends for our business. For more information regarding these risks and uncertainties that could actual results to differ materially from those expressed or implied in these forward-looking statements as well as risks relating to our business in general, we refer you to the section entitled Risk Factors in the company’s last annual report on Form 10-K and its other filings with the SEC.
I’d also like to note that any forward-looking statements made on this call reflect analysis of today. This presentation contains certain financial measures that are different from financial measures calculated in accordance with GAAP and may be different from calculations that measures made by other companies. The quantitative reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available on our Q3 2009 earnings press release which is posted on the investor relations section of our website at Shutterfly.com.
Now, I’d like to turn the call over to Shutterfly’s CEO, Jeff Housenbold.
Welcome everyone. Our objective today will start with the review of our Q3 2009 performance. Then I’ll turn the call over to Mark to review our Q3 financial performance in detail and to provide financial guidance for Q4 and the full year 2009. We’ll then open up the call for Q&A.
So let’s get started. Shutterfly delivered solid third quarter results. Q3 marked our 35th consecutive quarter of year over year revenue growth and we delivered the top line with better than expected margins. We continued our focus on innovation, execution, and Q4 preparedness across all facets of the business which drawn alignment of top three strategic imperatives; increasing our photo book, card and stationary and memory sharing businesses.
Now I’ll briefly recap some of our progress starting with our product and then turning to our services, marketing and commercial printing efforts.
Starting with Photo Books, we saw continued increases in awareness and adoption during Q3 as a result of our strong mix of marketing and promotional programs along with the launch of our new Simple Path Photo Book creation process.
By reducing the time, effort and price of creating a Photo Book, we believe that Simple Path will be a key tool in engaging a mass audience to experience the wow effect that comes from having your story told in a professionally bound, coffee table quality Photo Book. With Simple Path, we can now offer Photo Book that takes less than five minutes to make for under $15.000.
It is this kind of innovation that will continue to differentiate Shutterfly in the market place and drive increased first line product and services revenue.
Simple Path automatically creates a Photo Book in one click. Our smart algorhythym instantly organizes and arranges photo’s into a Photo Book that look professionally designed. Consumers can order as is or further personalize their book in just minutes using 21 exclusive style templates and easy to use editing tools.
Users can simply order the book or change the book size and cover type, rearrange photos and pages and add captions. Simple Path Photo Books can accommodate between 20 and 400 photos and are available on all five Photo Book sizes; 5 X 7, 7 X 9, 8 X 8, 8 X 11 and 12 X 12 starting as low as $12.99.
For Photo Bookers who want more options and control, they can still choose our award winning custom photo book experience which we updated with new styles and backgrounds. With thousands of layout and design options, the custom pack gives users the ability to build their book page by page and features more advanced editing and storyboarding tools, expanded space for text and journaling and includes more than 50 style options for endless creating possibilities.
All Shutterfly Photo Books can be shared with friends and family via Shutterfly’s popular share site and social networking and blogging sites like Face book, My Space and Word press. Custom pack and digital scrapbooks can also be uploaded to Shutterfly’s gallery.