What happened

Shares of Shutterstock (SSTK 1.04%) were moving higher in February as the digital-image specialist rose steadily over the course of the month, alongside the broader market. Then they got a boost on a strong fourth-quarter earnings report. According to data from S&P Global Market Intelligence, the stock finished the month up 16%. 

As you can see from the chart below, the stock's biggest gains of the month came toward the end of February when the company reported better-than-expected earnings for the fourth quarter.

SSTK Chart

SSTK data by YCharts.

So what

Shutterstock, which provides a database of more than 250 million images and 13 million video clips to businesses, marketing agencies, and media organizations, saw shares surge 10% alone on Feb. 26 due to its fourth-quarter earnings report. 

Check out the latest earnings call transcript for Shutterstock.

A laptop containing a number of different square images.

Image source: Getty Images.

The company posted moderate top-line growth, as paid downloads increased 6.6%, to 46.8 million, and revenue per download was up 2.1%. Revenue increased 10.1% adjusting for the sale of the software management service Webdam, and reported revenue rose 6.7%, to $162.1 million, which missed analyst estimates of $166.8 million. 

However, Shutterstock delivered for customers on the cost side, as operating expenses rose just 1.2% and operating income, as a result, more than doubled, to $15.6 million. That drove adjusted earnings per share up from $0.30 a year ago to $0.59, easily beating expectations of $0.42.

CEO Jon Oringer summed up the performance, saying: "During 2018, we made significant progress toward our vision to provide an end-to-end creative platform that improves our customer and contributor experience. We saw customer and contributor engagement at an all-time high -- both in the number of paid downloads and the number of approved contributors on our platform."

Now what 

Investors were encouraged by Shutterstock's solid outlook for 2019. The company sees 10%-12% revenue growth, to $685 million to $695 million, compared to analyst estimates of $688 million. It also forecast operating income of $37 million to $47 million, up from $32.5 million last year, or 29% at the midpoint. This indicates that investors should expect continuing focus on controlling costs. 

Shutterstock shares have been volatile over their history as early growth hopes were dashed. However, if the company can deliver steady bottom-line growth as it projects this year, investors should be rewarded.