Shutterfly Announces Fourth Quarter and Full Year 2007 Financial Results

Net Revenues Increase 51% Year-over-Year
Personalized Products and Services Increase 69% Year-over-Year
Net Income Increases 74% Year-over-Year

Shutterfly, Inc. (NASDAQ:SFLY), an Internet-based social expression and personal publishing service, today announced fourth quarter and full year 2007 financial results for the period ended December 31, 2007.

“2007 marks another year of strong execution for Shutterfly,” said president and chief executive officer Jeffrey Housenbold. “We delivered record growth in net revenues, adjusted EBITDA, net income, customers and orders. We are delighted that Shutterfly continues to take advantage of the enormous markets for social expression and personal publishing.”

Fourth Quarter 2007 Financial Highlights
Net revenues totaled $97.5 million, a 49% year-over-year increase.
Personalized Products & Services revenues1 were $61.9 million, a 55% year-over-year increase, and comprising 64% of total net revenues.
Print revenues totaled $35.6 million, a 39% year-over-year increase.
Net revenues from existing customers were 72% of total net revenues.
Gross profit margin was 60.0% of net revenues, as compared to 60.2% in 2006.
Operating expenses, excluding stock-based compensation, totaled $30.9 million, or 32% of net revenues
Adjusted EBITDA2 was $33.1 million, a 45% year-over-year increase.
GAAP net income was $16.9 million, a 39% year-over-year increase.
GAAP net income per diluted share was $0.63, a 26% year-over-year increase.