The print and photo products manufacturer’s Shutterfly Business Solutions segment grows sales by 19% in the quarter, outpacing its consumer sales.

Shutterfly Inc., a web-only manufacturer and retailer of photographic and printed products and services to businesses and consumers, continued strong B2B sales growth in the first quarter.

I'll remind you this is a business in which we have dozens and not hundreds of customers.
Christopher North, president and CEO
Shutterfly Inc.

Sales in the Shutterfly Business Solutions, or SBS, unit grew 19% in the quarter, Christopher North, president and CEO, told analysts on the company’s quarterly earnings call yesterday. SBS is part of Shutterfly’s enterprise business.

“In our enterprise business, SBS showed continued growth, delivering first quarter revenue of $31.3 million, a 19% increase year over year. We continue to add new clients, as well as securing follow-on contracts from the existing clients,” North told analysts, according to a transcript of the call from Seeking Alpha. “We are also making good progress in developing the SBS technology platform, which over time will help us scale the business with a reusable and automated workflow.”

North added that SBS in the past two quarters continued adding “customers to the business. And that’s driven some of our success. A lot of our success continues to be driven as well from winning new work with some of our existing customers. I’ll remind you this is a business in which we have dozens and not hundreds of customers. So we tend to look for customers that can grow to be multimillion-dollar accounts.”

SBS clients include DirecTV, Starwood Hotels and Best Western International, according to the SBS website.

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Shutterfly is upgrading both its SBS technology as well as moving its consumer products business to a single technology platform. Those upgrades led to increased expenses in Q1, chief financial officer Michael Pope told analysts. “Looking more specifically at our operating expense component, technology and development cost totaled $46 million for the quarter, an increase of 20% over the prior year, and 24% of net revenues,” he said. “In the first quarter we invested in mobile, the consumer platform consolidation and our SBS business.” Pope did not break out individual spending for those areas.

For the first quarter ended March 31, Shutterfly, No. 150 in the B2B E-Commerce 300, reported:

  • Shutterfly Business Solutions sales of $31.3 million, up 19.0% from $26.3 million in the first quarter of 2016.
  • Consumer sales of $160.6 million, up 3.3% from $155.4
  • Total sales of $192.0 million, up 5.7% from $181.7 million.
  • Technology and development expenses of $45.9 million, up 19.8% from $38.3 million.
  • Net loss of $33.2 million, compared with a net loss of $26.4 million in the same quarter last year.

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