Shutterfly 2010 Annual Report Download - page 43

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Net income increased by $2.2 million, or 60%, from 2008 to 2009. As a percentage of net revenue, net income was 3% of net revenue for
2009 compared to 2% for 2008.
Comparison of the Years Ended December 31, 2008 and 2007
Net revenues increased $26.8 million, or 14%, in 2008 compared to 2007. Revenue growth was primarily attributable to the increases in
personalized products and services revenues. PPS revenues increased $24.6 million, or 23%, to $129.9 million from 2007 to 2008 representing
61% of total revenues in 2008, up from 56% in 2007. There was increased revenue across our entire PPS product base, and most significantly
through increased sales of photo books and calendars. Print revenues increased $2.2 million, or 3%, to $83.6 million from 2007 to 2008. As a
percentage of total net revenue, 4x6 print revenues declined in 2008, decreasing from 22% in 2007 to 19% in 2008. During the third quarter of
2008, we made a permanent price adjustment on 4x6 prints, lowering the list price from $0.19 to $0.15 and we also reduced the lowest tier in our
prepaid plan to $0.10. Net revenue increases were also the result of year-over-
year increases in customers, orders and average order value
(“AOV”). AOV improvement was a result of a continued mix shift from prints to higher value personalized products, particularly photo books.
Year Ended December 31,
2009
2008
$ Change
% Change
(In thousands)
Income before income taxes
$
9,367
$
5,231
$
4,136
79
%
Net income
$
5,853
$
3,660
$
2,193
60
%
Percentage of net revenues
3
%
2
%
—
—
Year Ended December 31,
2008
2007
$ Change
% Change
(In thousands)
Net revenues
$
213,480
$
186,727
$
26,753
14
%
Cost of net revenues
$
96,214
$
84,111
$
12,103
14
%
Percentage of net revenues
45
%
45
%
—
—
Gross profit
$
117,266
$
102,616
$
14,650
14
%
Year Ended December 31,
2008
2007
Change
% Change
(In thousands, except AOV amounts)
Customers
2,789
2,357
432
18
%
Orders
7,569
7,062
507
7
%
Average order
value
$
28.20
$
26.44
$
1.76
7
%
41