Getty Images Q1 2025 Earnings Call Transcript

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May 12, 2025
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Steven Kanner
Steven Kanner
Vice President of Investor Relations & Treasury at Getty Images

Before we begin, we would like to note that due to the ongoing regulatory review process, we will not be able to comment on the status of the merger with Shutterstock for the first quarter twenty twenty five Shutterstock operating results. We appreciate your understanding and we'll share updates as soon as we are able. This call will include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks, uncertainties and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties and assumptions are highlighted in the forward looking statements section of today's press release and in our filings with the SEC.

Steven Kanner
Steven Kanner
Vice President of Investor Relations & Treasury at Getty Images

Links to these filings and today's press release can be found on our Investor Relations website at investors.gettyimages.com. During our call today, we will also reference certain non GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA less CapEx, and free cash flow. We use non GAAP measures in some of our financial discussions as we believe that they represent our operational performance and underlying results of our business. Reconciliations of GAAP to non GAAP measures as well as the description, limitations, and rationale for using each measure can be found in our filings with the SEC. After our prepared remarks, we'll open the call for your questions.

Steven Kanner
Steven Kanner
Vice President of Investor Relations & Treasury at Getty Images

With that, I will hand the call over to our Chief Executive Officer, Craig Peters.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Thanks, Stephen, and thanks to everyone for taking the time to join us today. I'll begin with a high level view of the quarter, after which Jen will add more detail on our performance. First quarter revenue for 2025 was $224,100,000 representing growth of 0.8% or 2.6% on a currency neutral basis. Adjusted EBITDA was $70,100,000 for the quarter, down 0.1 or up 2.2% on a currency neutral basis. We continue to see growth in our annual subscription business driven by our corporate sector, which remains in steady growth, with gains across premium access and Unsplash plus and with strong demand for video, news and sport.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

As expected, our revenue was impacted by early FX pressures, which have since reversed. Tariff driven uncertainty impacting customers' investment and continued softness in our agency, production and entertainment sectors, the latter due to impacts from the LA fires. We delivered a strong start to the year in our sport business where we are a trusted strategic partner across the full spectrum of the sports ecosystem. WWE, Major League Soccer, and the National Women's Soccer League all signed as new exclusive partners, while we renewed our long standing partnership with UEFA. Additionally, the Formula One series launched its seventy fifth anniversary season, where we hold an official designation for the series itself, along with the commercial relationships with teams including McLaren, Red Bull, and Aston Martin.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Our industry leading sports operation and commercial teams, photographic talent, and global distribution platform make Getty Images the partner of choice and therefore the premier destination for photographic coverage around this landmark year. In entertainment, our expert production team partnered with the Academy of Motion Picture Arts and Sciences, the Alton John AIDS Foundation Oscar Party, the Vanity Fair Oscar Party, Grammys, and BAFTA, to name a few. In the quarter, we also renewed content partnerships with Boston Globe, MTV, and welcomed new video partner, Vader Media. Our custom content solution continues to be popular with customers across different sectors who value the hands on experience of this team and data backed visual insights which produce visuals targeted for the customer's specific needs. This level of targeted content production is unique to Getty Images and one of the reasons companies like three ms and Fujitsu are repeat customers of this product.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Finally, I'm proud to see our expert photographers recognized by industry peers across a range of categories and award ceremonies during the quarter. The team was honored with 115 awards of excellence in categories including news, sport, and politics, at ceremonies such as the White House News Photographer Association Awards, the SJA British Sports Journalism Awards, NPPA's Best Photojournalism Awards, and World Press Photo. Award winning talent, prestigious partnerships, unique access, deep expertise embedded across our staff and our exclusive contributors, comprehensive coverage and archive, long standing customer relationships, and a high quality e commerce offering are all at the core of our durable business and what sets Getty Images apart. In terms of the proposed merger with Shutterstock, we received a request for additional information from the DOJ in The US and the CMA in The UK. Neither of these was unexpected given the nature of these regulatory processes.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

In the months ahead, we'll continue to work with the regulators to obtain all necessary approvals, and we continue to expect the transaction to close in the second half of twenty twenty five. Looking forward, our experience has shown that we can navigate challenging environments. By remaining flexible and financially disciplined, and with an annual subscription business that represents more than half of our revenue, we're positioning the business to adapt to the potential macro uncertainty ahead. Our first quarter results are largely in line with our expectations, and we feel good about the start to the year even with some of the challenges in the first quarter. As we look out to the remainder of the year, we remain on track to deliver our 2025 outlook.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Through it all, including the ongoing macroeconomic uncertainty, we're committed to investing in the core assets of the company and continuing to evolve our offering in ways that deepen our relevance for our customers. With that, I'll turn the call over to Jen to take you through the more detailed financials.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Our Q1 results reflect a solid yet challenging start to the year. As anticipated and discussed on our Q4 earnings call, the Los Angeles Fires, early FX pressures, and the broader macro uncertainty impacted our first quarter results. That said, we focused on executing through these challenges and delivered low single digit top line growth combined with a healthy adjusted EBITDA margin. Q1 revenue was $224,100,000 with year on year growth of 0.8% or 2.6% on a currency neutral basis. Included in these results are certain impacts of the timing of revenue recognition, which contributed approximately three twenty basis points to Q1 growth.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Annual subscription revenue was 57.2% of total revenue in the first quarter, up from 54.7% in Q1 of last year and also up from 53.8% in 2024. In total, subscription revenue grew by 5.4% or 7.2% on a currency neutral basis, driven primarily by growth in our premium access offering. We added 56,000 active annual subscribers to reach 318,000 in the Q1 LTM period, an increase of approximately 21% over the comparable LTM period in 2024, driven by our e commerce businesses iStock and Unsplash Plus. Of the 318,000 annual subscribers in the LTM period, 53% were brand new customers, and 28% were customers in our growth markets across LATAM, APAC, and EMEA. Our annual subscription revenue retention rate was 92.7% in the Q1 LTM period, up from 90% in the corresponding 2024 period.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Paid downloads were down slightly at $93,000,000 while our video attachment rate remains in steady growth, rising to 16.7% from 14% in the Q1 twenty twenty four LTM period. Editorial revenue was $82,600,000 an increase of 4% year on year and 5.6% on a currency neutral basis. Key growth drivers in this quarter included our coverage of global news events and sports. Our entertainment business was down due to the impact of the LA fires, while the archive was flat. Creative revenue was $132,200,000 down 4.8% year on year and 3% on a currency neutral basis.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Within creative, we saw strength across our premium access subscriptions, demand for video, and continued growth in Unsplash Plus. While our corporate business continues to perform well, our agency business, which is accounted for entirely within creative, was down high single digits, due primarily to declines at the large network agencies. Being an almost entirely a la carte business, agency is where we usually see a slowdown in spending and investment as agency customers navigate periods of potential macroeconomic uncertainty. Our media business saw a mid single digit decline, primarily due to the impact of the LA fires on our broadcast and production customers. This pullback, which is reflected across both creative and editorial, had the largest impact in the first two months of the quarter, with the Media segment returning to growth as we exited the quarter.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Other revenue was $9,300,000 an increase of $5,300,000 from Q1 twenty twenty four, driven primarily by two new multiyear creative content deals that included some level of AI rights with heavier upfront revenue recognition. Across our major geographies, we saw currency neutral revenue growth of 6.4% in The Americas, which is our largest reason with respect to revenue, while EMEA was down 3% and APAC was down less than one percent. Revenue less our cost of revenue as a percentage of revenue was consistent and strong at 73.1% in Q1 compared with 72.9% in Q1 twenty twenty four. SG and A expense was $98,300,000 down 2,700,000 year on year, with our expense rate decreasing to 43.9% of revenue from 45.4% last year. The lower expense rate was due primarily to a $4,600,000 decrease in stock based compensation.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Excluding stock based compensation, SG and A increased to $93,700,000 in the quarter or 41.8% of revenue, up from $91,800,000 or 41.3% of revenue in Q1 twenty twenty four. The increase in spend primarily relates to professional fees incurred for our ongoing litigation with Stability AI. However, that spend was in line with our expectations for the quarter. Adjusted EBITDA was $70,100,000 for the quarter, down 0.1% or up 2.2% on a currency neutral basis. Adjusted EBITDA margin was 31.3% compared to 31.6% in Q1 twenty twenty four.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

CapEx was $15,700,000 up $1,300,000 year over year. CapEx as a percentage of revenue was 7% compared to 6.5 in the prior year period. This increase was driven by the timing of the payment of 2024 performance compensation, a portion of which is capitalized. Q1 CapEx remained within our expected range of 5% to 7% of revenue. Adjusted EBITDA less CapEx was $54,400,000 down $1,300,000 year over year, representing a decrease of 2.4% or an increase of 0.5% on a currency neutral basis.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Adjusted EBITDA less CapEx margin was 24.3% in Q1 compared to twenty five point one percent in Q1 twenty twenty four. Free cash flow was negative $300,000 down from $7,100,000 in Q1 twenty twenty four, primarily due to the impact of cash outflows tied to merger related expenses. Free cash flow is dated net of cash interest expense of $38,200,000 and past taxes paid of $4,600,000 in the first quarter. We finished the quarter with $114,600,000 of balance sheet cash, down $19,600,000 from the ending balance in Q1 twenty twenty four and down $6,600,000 from Q4 of twenty twenty four. The lower cash balance relative to Q1 twenty twenty four is due to $55,200,000 of voluntary debt paydowns executed over the past twelve months and twelve point five million dollars of financing outflows related to the refinancing of our term loan.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

As just mentioned, during the quarter, we completed the refinancing of the existing term loan structure, replacing our old term loans, which were set to mature in February of twenty twenty six, with new loans now maturing in February 2030. As of March 31, we had total debt outstanding of 1,360,000,000.00 including $300,000,000 of 9.75% senior notes, dollars $580,000,000 of USD term loans at 11.25 percent fixed rate, 476,100,000.0 of Euro term loans converted using exchange rates as of 03/31/2025, with an applicable rate of 8.375%. We also have a $150,000,000 revolver that remains undrawn. We ended the quarter with a net leverage of 4.1 times compared to four times at the end of twenty twenty four. That slight uptick in net leverage primarily reflects the impact of the February refinancing and the impact of the weaker dollar on the value of our euro term debt.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

We continue to assess market conditions with respect to any potential refinancing or redemption of the $300,000,000 of bonds. Considering the foreign exchange rates and applicable interest rates on our debt balance as of March 31 and factoring in the new mandatory amortization on the Euro term loan, our estimated cash interest expense for 2025 is 133,000,000. In summary, we ended the first quarter with positive operating metrics and a healthy and growing annual subscription business, which helps to mitigate some of the potential impacts from macroeconomic volatility. We continue to see opportunities to build positive momentum, expanding our customer base, our annual subscription business, and our geographic footprint, and driving greater video consumption. Now turning to our outlook for the full year 2025.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Taking into consideration the impact of the weaker dollar and assuming full year 2025 FX rates with the euro at 1.1 and the GDP at 1.3, we are updating our guidance for FX with impacts as follows. We anticipate revenue of $931,000,000 to $968,000,000 down 0.9% to up 3.1% year over year. On a currency neutral basis, this represents a decrease of 1% to an increase of 3%. This remains unchanged from prior guidance. As you think through the cadence for the year, we would expect to see growth trends from Q1 continue into Q2, with tougher comparisons flattening growth in the back half of twenty twenty five.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

The update to our guidance reflects the $1,000,000 impact from FX, inclusive of the $3,800,000 headwind in the first quarter, which will be offset by a benefit for the rest of 2025, including an estimated $1,400,000 in the second quarter. We expect adjusted EBITDA of $277,000,000 to $297,000,000 down 7.6% to 1.2 year over year or down 7.9% to 1.4% currency neutral. Included in the adjusted EBITDA expectations is a similar cadence for the estimated FX impact, with an approximate $500,000 tailwind in 2025, inclusive of the 1,600,000 headwind from the first quarter, offset by a tailwind across the remainder of the year, which includes an estimated $500,000 in the second quarter. Please note this guidance includes the anticipated impact of the odd year versus even year editorial event calendar comparison, as well as the impact from disruptions in production activity due to the LA fires and some continued lag in a return to pre Hollywood strike production levels. Additionally, the second half of twenty twenty five faces tougher year on year comparisons given the year on year lift in performance post strike during the second half of twenty twenty four.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

On the cost side, our guidance continues to include approximately $8,000,000 in one off increases in SG and A, which were disclosed during our Q4 earnings call, which will be largely concentrated in the Q2 to Q4 periods as we accelerate our SOPS compliant efforts in 2025. Please note all other merger related costs are not included in this guidance as they are considered one time in nature and therefore excluded from adjusted EBITDA. Finally, any potential broader impacts which may result from the trade wars and other global macroeconomic conditions remain unknown and may not be fully reflected in this guidance. With that, operator, please open up the call for questions.

Operator

Thank you.

Operator

We'll go first to Ron Josey with Citi.

Ronald Josey
Ronald Josey
Managing Director at Citi

Great. Thanks for taking the question. I have one for Craig and one for Jen. Craig, on the subscription side, you talked about the strength and the mix shift to corporate. Talk to us more about that mix shift to corporate, what you're seeing from a demand perspective.

Ronald Josey
Ronald Josey
Managing Director at Citi

And as we look at the numbers of overall ending or active annual subscribers, it looked like growth maybe ticked down a little bit. So wondering if there's maybe a change in the size and scale of your subscriber base. That's question one. And then Jen, I think I heard you say for 1Q there was some timing of revenue in the quarter, about two twenty basis points impact, but also some impact from FX and tariff uncertainty and agency headwinds and fires. And just I think you said this, but just want to confirm, are we beyond most of those notwithstanding making changes to the macro?

Ronald Josey
Ronald Josey
Managing Director at Citi

Thank you.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Great. Thanks, Ron. On the subscription side of things, we're seeing really a continued trend that has been a trend for almost more than a decade now, which is the continued build out of internal corporate marketing groups, creative groups, in support of their owned and operated marketing, their website, their social media, etcetera, their sales and marketing collateral. And that's been a long driver about increasing not only our corporate segment, but the subscription business from the corporate segment. And so that's one driver that continues.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

And the other one is really at the iStock level. Our small and medium sized businesses that are are we classify within the corporate segment. And we've been increasing the volume of subscriptions and the prominence of subscription on that website and service. And so those are the real drivers. We have been testing out of that a bit on the iStock side as we optimize to get the right blend between subscription customers and a la carte.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

So that is going to slow. I think we've mentioned that over time our subscription growth will slow, But we continue to be encouraged by the take up that we're seeing at iStock and continue to be very encouraged by the revenue retention and renewal rates on the subscription side of things overall, most emphasis on that within the corporate space. Jen?

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Yep. Hi, Ron. So the revenue recognition item, that's actually a quarterly, accounting entry. So that's the, ASC six zero six entry. I think for the most part, we do try to quantify that on every call.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

So that's a standard item. I wish I could say that one is going away, but we'll continue to have that every quarter. Again, that's just intended to smooth out revenue to align with when you've met your obligations to your customers over time. The intent is that that nets out to zero, but it can have a little bit of impact positive or negative on a quarterly basis. The other items, I think that you mentioned that I mentioned that impacted Q1, LA Fires, FX pressures, broader macro.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

LA Fire, impacts specifically on the production side of things. We expect that that's going to be a little bit of a continued impact for us. Again, that's embedded in the guidance. FX pressures, again, as you know, we see FX volatility move around. We did take the step this quarter to go ahead and update our guidance for that because we did see a decent size movement from the last time we shared out guidance.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

So we'll continue to monitor that update guidance as is appropriate. Broader macro, again, to the best of our ability at this point that is baked into our guidance. We caveat towards the end, don't know anything specific at this point that we're seeing in the business related to tariffs or trade wars or how that evolves. So again, to the best of our ability, all of that baked into guidance as we see something more material, we'd of course take that into consideration.

Ronald Josey
Ronald Josey
Managing Director at Citi

Great. Thanks, Craig. Thanks, Jen.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Sure.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Thanks, Ryan.

Operator

We'll go next to Mark Utzowitz with Benchmark.

Mark Zgutowicz
Equity Research Analyst at The Benchmark Company LLC

Thank you. Hi, Jen and Craig. Jen, a question for you. Your annual guidance implies a constant currency acceleration, at least a modest one for the rest of the year. I was just hoping you can maybe share where you expect that acceleration to come from and or what your present guidance assumes in terms of data licensing revenue versus the prior guide?

Mark Zgutowicz
Equity Research Analyst at The Benchmark Company LLC

And then Craig, broader question. Can you just remind us again on the specifics of the ruling you're hoping to get from existing litigation protecting your copyrighted content against GenAI training, maybe specifically with Stability AI and others? And then in parallel, can you also clarify what your copyright protections are in place covering your exclusive content likeness agreements, similar to what you have with partners like the NBA and Major League Baseball. We're obviously seeing increasing AI models within social media that are enabling the capturing and doctoring of images in these sports partners and the like. So just trying to get a sense, sort of what boundaries are in place that protect you on the content likeness side of things.

Mark Zgutowicz
Equity Research Analyst at The Benchmark Company LLC

Thanks.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Jen, feel free to start.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Yeah, so with respect to currency neutral guidance, so on the question of data licensing and what's embedded, no real change there to what was in our previous guidance and that puts that bucket of revenue, call it somewhere in the 2% to 3% give or take range of total revenue, but nothing really has moved there versus prior guidance. And then as we move through the year, some of the items that I just mentioned and spoke to in prepared remarks, things like some of the impacts from LA fires on the production media side of business, we think we'll start to see some improvement coming out of that relative to Q1. Still some lingering impact from Hollywood strikes, that side of things still not a 100% back to pre Hollywood strike levels, but again, feel like as we move through the year, we'll start to see improvement there. And then more broadly, the areas where we think we have growth remain the same. And that's frankly continuing to drive that subscription business.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

We noted in the remarks there, we're seeing a lot of that growth come from new customers and we're seeing a lot of that growth come from geographic markets where we're tapping into new customer segments. So a lot of opportunity there for the business as we grow that subscriber base. Again, many of whom are coming in new to the business. And then areas across video continuing to see traction on the video side of things, continuing to monetize our Unsplash business, specifically Unsplash plus paid subscription, which continues to do quite well. So a lot of the same growth levers that we've been tracking along on and then some improvement in some of the macro elements that impacted Q1.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Thanks, Jen. And Mark, I'll do my best to navigate the world of AI and copyright in a relatively short amount of time. So let me be clear. Right now, the world of AI models and AI providers is largely operated in a mode of training on scraped content across the internet. Doing that under the belief that it would qualify as quote unquote fair use or similar concepts around the globe.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

And that means that they are scraping content from Getty Images, they're scraping content from the likes of the NBA and Major League Baseball, and that content will include the name and likeness of those individuals. It can contain personal privacy items and can contain other third party intellectual property. What we advanced with Stability AI in The UK and in The US is litigation on that point, to hopefully get clarity from the courts of whether training on copyrighted material was permissioned. Now we believe that not all training and use of copyrighted content requires permission. There is research and development.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

There are non commercial applications that can be put out there. But we want to get clarity on that, because we fundamentally don't believe that the likes of companies like Stability AI should be able to train on copyrighted material and then provide these tools out into the marketplace, in some cases targeting the very same market. So that trial is going to happen in June of this year in The UK. We still don't have clarity of when that will happen in The US. There's some venue questions, which is why we have two pieces of litigation in there.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Within the past couple days, just within the last seventy two hours, we've seen the US Copyright Office issue a report that aligns to our view with respect to AI training. And we've also seen the UK House of Lords just today adopt amendments, which we fully support to their proposed UK AI Act, again which aligned to us. So both are welcome steps to get clarity within the landscape, but they're not definitive. And we continue alongside our litigation, continue to work with our partners and other industries, like the music industry, like the motion picture industry in order to advance our perspective, so that ultimately we can have a world where we both have AI capabilities, and we have a world that respects creators and intellectual property and personal privacy rights. So that's what we're working through.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Again, we hope we start to get some clarity on that in the coming months. And that's how it kind of works out. I do want to just state one thing that we do not do. Referenced our data licensing, where we do limited amount of data licensing for AI purposes and machine learning purposes. And Jen kind of gave you a view to that over the balance of the year.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

In no case does Getty Images license its editorial content. So we are not licensing news, sport, entertainment, or archival content into those deals. Again, those would be covered by personal privacy rights and intellectual property rights that we are not comfortable conveying as an editorial outlet. So there's your AI copyright 101 mark. Hopefully that answers the question.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

If not, happy to go deeper offline.

Mark Zgutowicz
Equity Research Analyst at The Benchmark Company LLC

Thanks, Craig. Appreciate it, Jen, as well.

Operator

We'll go next to Danny Pfeiffer with JPMorgan.

Danny Pfeiffer
Danny Pfeiffer
Equity Research Associate at JP Morgan

Hey, thanks for the questions. Craig, so the first one, can you provide an update on your own Gen AI offering, what the client adoption looks like and how you're seeing that adoption curve scaling over the next year along with revenue? And then Jen, on the client spend being held back due to tariff uncertainty in the first quarter, can you just provide any color on how that trend has changed since Liberation Day starting in April? Thanks.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Sure, Danny. So on the AI front, we continue to see growing adoption. It's not accelerating adoption, but it's consistent adoption. It's still in the low single digits in terms of customer adoption and from a revenue standpoint, it's still in the and when I say low single digit, mean percentage points. And when I say revenue, it's still in the single digit millions in terms of revenue addition into the business.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

But it is growing as we see our customers adopt. And I think what we've now been doing is increasingly bundling AI into our subscriptions, because what we found was less so text to image generation, we actually found that our customers wanted to use the model and the capabilities in order to modify existing pre shot content. And so by bundling that together, we make that easier for the customer. And so I expect we'll see more adoption in the future as we roll those out. And we're just early stages in terms of rolling out those bundles across iStock and across getting used.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

But we think that's a good thing for customers because we see you know, we hear positive feedback, we see them doing things that they would have historically taken them a lot of time in software products to, you know, increase the copy space or to, you know, to insert their product or things along those lines that they can now do relatively easily with AI. So still early days in terms of ultimately business adoption of this into their end projects, which is where our content goes. But we are seeing an increase at a kind of pretty steady clip. Jen?

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

Yeah, thanks for the question, Debbie. So, just to clarify, I think my comment there was a little bit more of a broader comment and that is that historically for this business, when there are periods of macro uncertainty where we tend to see it first is in the agency side of our business. And that is intuitively as agency customers start to slow their spend with the agency, agencies slow their need for content from us. That wasn't necessarily a cause and effect there with tariffs or trade war per se. It's just an anecdotal comment for us.

Jennifer Leyden
Jennifer Leyden
CFO at Getty Images

So obviously in Q1, we did see our agency business in decline about 9%, roughly 9% year on year. We have seen steeper declines for sure in the agency business over the past couple of years, but a decline nonetheless. It's an assumption for us that there is a bit of a slowdown macro impact on the agency customer side of things. And that's what we're seeing play out there. But no direct cause and effect that we would be able to definitively quantify there.

Craig Peters
Craig Peters
Chief Executive Officer at Getty Images

Yeah, only thing I would add is we listen to their earnings calls just like you do and there have been some mention there. You know, over Q4 and into Q1 for those that have reported. So we're taking some of that information into Jen's comments as well.

Danny Pfeiffer
Danny Pfeiffer
Equity Research Associate at JP Morgan

Gotcha. Thank you.

Operator

And it appears that we have no further questions at this time. That will conclude the Getty Images First Quarter twenty twenty five Earnings Conference Call. We thank you for your participation. You may disconnect at any time.

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Key Takeaways

  • Q1 revenue was $224.1 M, up 0.8% year-over-year (2.6% currency neutral), with adjusted EBITDA of $70.1 M essentially flat after FX headwinds and impacts from LA fires and tariff uncertainty.
  • Annual subscription revenue reached 57.2% of total, growing 5.4% (7.2% CC), as the subscriber base rose 21% year-over-year to 318,000 with a 92.7% retention rate.
  • Getty Images secured major sports and entertainment partnerships, including exclusive deals with WWE, MLS, NWSL and UEFA renewals, plus event coverage for the Oscars and Grammys, and custom content wins with clients like 3M and Fujitsu.
  • The proposed merger with Shutterstock is under regulatory review after DOJ and CMA requests, with the company still expecting to close the transaction in H2 2025.
  • Getty reaffirmed full-year 2025 guidance of $931 M–$968 M in revenue and $277 M–$297 M in adjusted EBITDA, and extended its term loan maturities to 2030 while maintaining net leverage at 4.1x.
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Earnings Conference Call
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