Shutterfly, Inc. (SFLY)

Q3 2010 Earnings Call

October 27, 2010 5:00 pm ET

Executives

TST Recommends

John Kale - VP of Finance

Jeffrey Housenbold - CEO

Mark Rubash - CFO

Analysts

Imran Khan - JPMorgan

Youssef Squali - Jefferies & Company

Mitchell Bartlett - Craig-Hallum Capital

Kevin Koppleman - Cowen & Company

Colin Sebastian - Lazard

James Cakmak - Sidoti & Company

Mitch Bartlett - Craig Hallum

Operator

Compare to:
Previous Statements by SFLY
» Shutterfly, Inc. Q2 2010 Earnings Call Transcript
» Shutterfly Inc. Q1 2010 Earnings Call Transcript
» Shutterfly, Inc. Q4 2009 Earnings Call Transcript
» Shutterfly, Inc. Q3 2009 Earnings Call Transcript

Welcome everyone to Shutterfly’s third quarter 2010 earnings conference call. This call is being recorded. I would now like to turn the call over to John Kaelle, Vice President of Finance for Shutterfly.

John Kaelle

Welcome to Shutterfly’s third quarter 2010 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 that we will use 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 as of today.

This presentation contains certain financial performance measures that are different from financial measures calculated in accordance with GAAP and may be different from calculations and 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 third quarter Q3 2010 earnings press release, which is posted on 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 would also like to note that any forward-looking statements made on this call reflect analysis as of today. This presentation contains certain financial performance measures that are different from financial measures calculated in accordance with GAAP and may be different from calculations or measures made by other companies. A quantitative reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is available in our third quarter 2010 earnings press release which is posted on the Investor Relations section of our website at shutterfly.com.

Now, I would like to turn the call over to Shutterfly's CEO, Jeff Housenbold.

Jeff Housenbold

Thanks John and welcome everyone. I’ll start today discussion with an overview of our Q3 performance, follow by summary about progress and key initiative and then highlight our focus as we head in Q4 RSP. Following my remarks, Mark will review our Q3 financial results in detail and provide our updated guidance for Q4 and full year 2010. We’ll then open the call to your questions.

As you listen to our remarks today, I’d like you to keep in mind two key messages. First, we continue to see very solid growth rate and increasing contributions from our award winning line of Photo Books, cards and stationery and for our private personalized shutterfly shared website.]

Revenue growth we had throughout the year and the accelerated growth we seek from our core personalized product. We live in doubt that our strategy on target and that we are continuing to delight our customers with unique, stylist and in creative ways to share life joy and to stay connected to the people that matter in there lives.

Second, throughout 2010, we’ve been making important investments in key areas of our business. We believe these investments position us well for this years Q4 holiday season and will enable accelerated product innovation and operational efficiencies in 2011 and beyond. Getting these investments are centered on improving our platform and storage architectures and our image writing and e-commerce capabilities.

In addition, we have released many new products, features and design improvements during the year. These improvements have provided our customers with an elegant user experience and on trend design forward products while further differentiating our brand and improving out competitive position.

With these messages in mind I will now summarize our third quarter headline financial results. Shutterfly delivered solid third quarter result that clearly reflect our continued focus on key strategic initiative, our relentless goal of satisfying very customer and our goal of increasing shareholder value. This quarter marked our 39 consecutive quarter of year-over-year revenue growth and we delivered the top-line with better than expected margin.

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