Getty Images Holdings, Inc. (NYSE:GETY) Q4 2024 Earnings Conference Call March 17, 2025 4:30 PM ET Company Participants Steven Kanner - Investor Relations Craig Peters - Chief Executive Officer Jenn Leyden - Chief Financial Officer Conference Call Participants Cory Carpenter - JPMorgan Mark Zgutowicz - The Benchmark Company Operator Good afternoon, and welcome to Getty Images Fourth Quarter and Full Year 2024 Earnings Conference Call. Today's call is being recorded. We have allocated one hour for prepared r ...

Financial Performance - Getty Images Holdings, Inc. reported a quarterly loss of $0.01 per share, missing the Zacks Consensus Estimate of $0.04, and a decline from earnings of $0.09 per share a year ago, representing an earnings surprise of -125% [1] - The company posted revenues of $247.32 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.32%, and an increase from year-ago revenues of $225.94 million [2] - The current consensus EPS estimate for the coming quarter is $0.04 on revenues of $235.43 million, and for the current fiscal year, it is $0.14 on revenues of $951.36 million [7] Stock Performance - Shares of Getty Images Holdings, Inc. have lost about 5.6% since the beginning of the year, compared to a decline of -4.1% for the S&P 500 [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Outlook - The Internet - Software industry, to which Getty Images belongs, is currently in the top 48% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by a factor of more than 2 to 1 [8]

Revenue and Subscription Growth - Getty Images' annual subscriptions represented more than half of total revenue as of December 31, 2024, indicating a strong shift towards subscription products[30] - For the year ended December 31, 2024, Creative content accounted for 58.9% of revenue, with 56.0% generated through annual subscription products[30] - Editorial content represented 36.8% of revenue for the same period, with 53.7% derived from annual subscription products[30] - The company reported a total of 717,000 purchasing customers for the year ended December 31, 2024, a decrease from 799,000 in 2023[407] - Total active annual subscribers increased to 314,000 in 2024, up from 236,000 in 2023, indicating strong growth in subscription services[407] - The LTM annual subscriber revenue retention rate improved to 92.9% in 2024, compared to 92.4% in 2023[407] - Total purchasing customers decreased to 717 thousand for the LTM ended December 31, 2024, down from 799 thousand in 2023 and 835 thousand in 2022, attributed to a shift towards more committed annual subscription products[409] - Total active annual subscribers increased to 314 thousand for the LTM ended December 31, 2024, compared to 236 thousand in 2023 and 129 thousand in 2022, driven by expanded e-commerce subscriptions[411] - Annual subscriber revenue retention rate was 92.9% for the LTM ended December 31, 2024, compared to the prior period, indicating strong retention of revenue from annual subscription customers[414] - The shift to more committed solutions positively impacted annual revenue per purchasing customer, which grew by 14.2% to $1,310 for the LTM ended December 31, 2024[409] Customer Growth and Engagement - The company added more than 385,000 new customers during the year ended December 31, 2024, demonstrating strong customer growth[34] - Marketing efficiency improved, with new customers per million dollars of digital marketing spend increasing by over 30% in 2024 compared to 2019[38] - The video attachment rate increased to 16.5% for the year ended December 31, 2024, up from 14.1% in 2023[44] - The LTM video attachment rate increased to 16.5% in 2024, up from 14.1% in 2023, indicating higher engagement with video content[407] Content and Product Offerings - The company launched Generative AI by Getty Images in partnership with NVIDIA in fall 2023, designed to be a commercially safe AI image generation service[27] - The company launched Generative AI services in 2023 and early 2024, leveraging partnerships with AI innovators to enhance image and video generation and editing capabilities[49] - The acquisition of Unsplash has strengthened the company's position in the creative long-tail economy, attracting over 16 million visitors per month and averaging more than 96 million monthly image downloads[48] - As of December 31, 2024, the company owned or licensed over 604 million images and videos, with nearly 70% of revenue generated from exclusive content[52] - The company has a total of 572 million image collections and 32 million video collections as of December 31, 2024, reflecting growth in content offerings[407] - Image collection grew by 7% to 572 thousand images as of December 31, 2024, from 535 thousand in 2023, while video collection increased by 17% to 32 million videos[416] Financial Performance - Adjusted EBITDA for the year ended December 31, 2024, was $300.3 million, compared to $301.4 million in 2023 and $305.0 million in 2022[422] - Net income for the year ended December 31, 2024, was $39.5 million, an increase from $19.6 million in 2023, compared to a net loss of $77.6 million in 2022[422] - Adjusted EBITDA margin for the year ended December 31, 2024, was 32.0%, slightly down from 32.9% in 2023[422] Operational and Strategic Insights - The corporate market contributed approximately 56% of revenue for the year ended December 31, 2024, highlighting its importance to growth[33] - The company has successfully reduced customer acquisition costs by over 20% since 2019, bringing it down to $133 in 2024[38] - The company has a successful track record of executing and integrating strategic acquisitions to enter adjacent markets and accelerate growth[50] - The company continues to focus on subscription offerings to provide comprehensive content solutions, with a strong pipeline of new customers[411] Diversity and Workforce - The company had almost 1,700 employees as of December 31, 2024, with a diverse workforce representing over 32 countries[60] - The company is committed to a culture of diversity and inclusion, ensuring equal opportunities and respect for all employees[62] Cash Flow and Financial Obligations - For the year ended December 31, 2024, cash provided by operating activities was $118.3 million, a decrease of 10.8% from $132.7 million in 2023[376] - Cash used in investing activities increased to $72.5 million in 2024 from $57.0 million in 2023, primarily due to the acquisition of Motorsport Images LLC and Motorsport.com, Inc.[380] - Cash used in financing activities was $56.2 million in 2024, compared to $45.4 million in 2023, reflecting debt issuance costs and principal payments on Term Loans[381] - The Business Combination resulted in gross proceeds of approximately $864.0 million, which included a cash payment of $615.0 million to redeem preferred stock and $300.0 million to repay a portion of outstanding indebtedness[373] - The company expects to fund its ordinary course operating activities from existing cash and cash flows from operations for at least the next 12 months[372] - The net cash provided by operating activities decreased by $30.4 million from 2022 to 2023, primarily due to increased interest expenses[382] - The company’s liquidity could be adversely affected by pending tax audits and legal proceedings, which may result in tax liabilities exceeding reserved amounts[374] - The company’s cash flows from investing activities are primarily related to property and equipment purchases and internal software development[379] - As of December 31, 2024, total contractual cash obligations amount to $1,658,217,000, with long-term indebtedness accounting for $1,481,680,000[385] - The company has no material off-balance sheet arrangements as of December 31, 2024, except for operating leases[387] Economic and Market Conditions - Management believes that inflation has not materially affected the business, but acknowledges potential risks if significant inflationary pressures arise[388] - The company’s cash flows are subject to fluctuations due to economic conditions and customer behavior, impacting revenue from subscription plans[72]

Revenue Performance - Q4 2024 revenue increased by 9.5% year over year to $247.3 million, with currency neutral growth of 8.5%[6] - Annual subscriber revenue grew by 11.8% in Q4 2024, representing 54.9% of total revenue, up from 53.8% in Q4 2023[5] - Full year 2024 revenue increased by 2.5% to $939.3 million, with creative revenue down 4.5% and editorial revenue up 7.9% year over year[6] - Revenue for Q4 2024 was $247.3 million, an increase of 9.5% from $225.9 million in Q4 2023[26] - Total revenue for the twelve months ended December 31, 2024, reached $939.3 million, up from $916.6 million in the previous year, reflecting a growth of 2.5%[26] - Total revenue for the year ended December 31, 2024, reached $939,287,000, up 2.5% from $916,555,000 in 2023[40] - The Creative segment generated $552,828,000 in revenue for the year, a decrease of 4.5% from $578,739,000 in 2023[40] - The Editorial segment saw revenue increase by 7.9% to $345,932,000 for the year ended December 31, 2024, compared to $320,643,000 in 2023[40] Profitability - Net income for Q4 2024 was $24.7 million, down from $39.1 million in Q4 2023, with a net income margin of 10.0%[6] - Adjusted EBITDA for Q4 2024 was $80.6 million, up 11.7% year over year, with an adjusted EBITDA margin of 32.6%[6] - Net income attributable to Getty Images Holdings, Inc. for Q4 2024 was $24.4 million, down from $39.1 million in Q4 2023, a decrease of 37.5%[26] - Net income for the year ended December 31, 2024, was $39,472,000, a significant increase from $19,577,000 in 2023, representing a growth of 101.5%[30] - Adjusted EBITDA for the year ended December 31, 2024, was $300,271,000, slightly down from $301,442,000 in 2023, indicating a margin of 32.0%[35] - Free Cash Flow for the year ended December 31, 2024, was $60,900,000, compared to $75,700,000 in 2023, reflecting a decrease of 19.6%[38] Customer Metrics - Total purchasing customers decreased by 10.3% to 717,000, while active annual subscribers increased by 33.4% to 314,000[11] Guidance and Future Outlook - The company expects 2025 revenue guidance between $918 million and $955 million, reflecting a year-over-year decline of 2.3% to growth of 1.6%[13] - The company highlighted risks related to competition, technology adaptation, and international market expansion in its forward-looking statements[21] Debt and Liquidity - Total debt as of December 31, 2024, was $1.314 billion, including $300 million in senior notes and a term loan balance of $1.014 billion[12] - The company has $150 million available through its revolver, resulting in total available liquidity of $271.2 million[12] - The total balance of term loans outstanding was $1,014,400,000 as of December 31, 2024, down from $1,100,600,000 in 2023[41] Assets and Liabilities - The company reported a total of $1.51 billion in goodwill as of December 31, 2024, slightly up from $1.50 billion in 2023[28] - Total assets decreased to $2.56 billion in 2024 from $2.60 billion in 2023, a decline of 1.5%[28] - Total liabilities decreased to $1.85 billion in 2024 from $1.92 billion in 2023, a reduction of 3.6%[28] - The company’s cash and cash equivalents decreased to $121.2 million in 2024 from $136.6 million in 2023, a decline of 11.0%[28] - Cash and cash equivalents at the end of the period were $125,304,000, down from $140,850,000 at the end of 2023[30] Operating Expenses - Operating expenses for Q4 2024 totaled $211.4 million, compared to $185.1 million in Q4 2023, representing an increase of 14.2%[26] - The company reported a net cash provided by operating activities of $118,320,000 for the year, down from $132,716,000 in 2023[30] - The company incurred $57,450,000 in capital expenditures for the year ended December 31, 2024, compared to $56,999,000 in 2023[30] Merger Announcement - Getty Images announced a merger agreement with Shutterstock on January 7, 2025, to create a premier visual content company[14] Shareholder Information - The weighted-average Class A common shares outstanding increased to 411.4 million in Q4 2024 from 403.6 million in Q4 2023[26]

Core Viewpoint - Getty Images Holdings, Inc. reported a return to full-year growth in 2024, driven by premium content and strong partnerships, while focusing on sustainable customer value and investment in core assets [2][19]. Financial Performance Summary - Fourth Quarter 2024 revenue reached $247.3 million, marking a 9.5% increase year-over-year and an 8.5% increase on a currency-neutral basis [6][7]. - Annual subscriber revenue grew by 11.8% in Q4, representing 54.9% of total revenue, up from 53.8% in Q4 2023 [6][7]. - Full-year 2024 revenue increased by 2.5% to $939.3 million, with creative revenue declining by 4.5% and editorial revenue increasing by 7.9% year-over-year [6][7]. Profitability Metrics - Net income for Q4 2024 was $24.7 million, down from $39.1 million in Q4 2023, with a net income margin of 10.0% compared to 17.3% in the prior year [7][30]. - Adjusted EBITDA for Q4 2024 was $80.6 million, up 11.7% year-over-year, with an adjusted EBITDA margin of 32.6%, an increase from 31.9% in Q4 2023 [7][43]. Liquidity and Balance Sheet - As of December 31, 2024, the company had an ending cash balance of $121.2 million, down from $136.6 million a year earlier, with total debt amounting to $1.314 billion [16][34]. - The company has $150.0 million available through its undrawn Revolver, resulting in total available liquidity of $271.2 million [16]. Key Performance Indicators (KPIs) - Total purchasing customers decreased by 10.3% to 717,000, while active annual subscribers increased by 33.4% to 314,000 [11][12]. - The annual subscriber revenue retention rate improved to 92.9%, up from 92.4% in 2023 [12]. Financial Outlook for 2025 - The company projects revenue for 2025 to be between $918 million and $955 million, reflecting a year-over-year decline of 2.3% to an increase of 1.6% [18]. - Adjusted EBITDA is expected to range from $272 million to $290 million, indicating a year-over-year decline of 9.5% to 3.3% [18]. Merger Agreement - On January 7, 2025, Getty Images announced a merger agreement with Shutterstock, aiming to create a premier visual content company, pending regulatory approvals and stockholder consent [19].

Core Insights - Getty Images has been named the Exclusive Commercial Photography and Imagery Licensing Partner of the National Women's Soccer League (NWSL) [1] - The partnership will provide high-quality imagery from all upcoming NWSL matches and events, including the regular season, playoffs, and championship [2] - Getty Images aims to enhance the visibility of women's sports through intentional and inclusive visuals, addressing the visibility gap in sports storytelling [4] Company Overview - Getty Images has over 30 years of experience in sports photography and is recognized for its creativity and service excellence [3] - The company partners with 125 leading sports governing bodies, leagues, and clubs globally, covering over 50,000 sports events annually [5] Industry Context - The NWSL regular season is set to begin on March 14, 2025, with all 14 teams participating [1] - The partnership is expected to elevate the visibility of women's professional soccer and showcase the talent of NWSL athletes [5]

Core Insights - Getty Images has been named the Exclusive Commercial Photography and Imagery Licensing Partner of the National Women's Soccer League (NWSL) [1][2] - The partnership will cover all upcoming matches and events, including the regular season, playoffs, and championship, providing exclusive access to various on and off-the-pitch moments [2][5] - Getty Images aims to enhance the visibility of women's sports through high-quality imagery and storytelling, leveraging its extensive experience and distribution platform [3][4][5] Company Overview - Getty Images has over 30 years of experience in sports photography and is recognized for its creativity and service excellence [3] - The company is the official photographer or photographic partner to 125 leading sports governing bodies, leagues, and clubs globally, covering over 50,000 sports events annually [5] Industry Context - There is a growing interest in women's sports, necessitating intentional and inclusive visuals to maintain audience engagement [4] - Getty Images' VisualGPS research indicates that visuals are increasingly vital in sports storytelling, particularly in addressing the visibility gap for women and girls in sports [4]

Core Insights - Getty Images has renewed its multi-year partnership with UEFA, continuing as UEFA's official photographic agency [3][4][6] - The agreement includes comprehensive coverage of all UEFA men's and women's competitions, including the UEFA Champions League and the new UEFA Women's Europa Cup starting in the 2025/2026 season [4][5] - Getty Images will provide an expanded range of creative editorial content, including official player portraits and short-form video content for UEFA partners [5][6] Company Overview - Getty Images has been a trusted partner for 30 years to leading sports rights holders and is the official photographer for 125 significant sports governing bodies, leagues, and clubs globally [8] - The company has worked with UEFA since 2004 and has content from all UEFA competitions dating back to the first European Cup Final in 1956 [9] Partnership Details - The partnership will cover the UEFA Women's EURO 2025 in Switzerland, with photographers capturing various aspects of the tournament across eight cities [6] - Getty Images aims to deliver high-quality content and engage fans through almost real-time imagery [6][7]

Company Announcement - Getty Images Holdings, Inc. plans to release its fourth quarter and full year 2024 results after market close on March 17, 2025, followed by a conference call at 4:30 p.m. Eastern Time [1] - The conference call can be accessed via phone or through a webcast on the company's Investor Relations website [2][3] Company Overview - Getty Images is a leading global visual content creator and marketplace, offering a wide range of content solutions to customers worldwide [4] - The company collaborates with over 576,000 content creators and more than 340 content partners, covering over 160,000 news, sports, and entertainment events annually [4] - Getty Images maintains one of the largest privately-owned photographic archives, with millions of images dating back to the inception of photography [4] Technological Advancements - The company is leveraging generative AI technologies to enhance its content offerings, allowing customers to create commercially safe visuals through text to image generation [5]

Core Viewpoint - Getty Images Holdings, Inc. has successfully completed a comprehensive refinancing of its existing term loans, enhancing its financial position and liquidity to support strategic growth and maximize shareholder returns [1][4]. Financing Details - The refinancing includes a new $580 million 5-year U.S. dollar term facility and a new €440 million 5-year euro term facility, which will be used to fully repay existing term loans [2]. - The Borrowers' $300 million senior unsecured notes due March 2027 remain outstanding [2]. Management Statements - The CEO of Getty Images emphasized that the refinancing positions the company to provide the best visual content to meet customer needs [3]. - The CFO highlighted that this initiative reflects Getty Images' strong financial foundation and commitment to strategic growth, enhancing liquidity and financial agility [4]. Company Overview - Getty Images is a leading global visual content creator and marketplace, serving customers worldwide through its brands, including Getty Images, iStock, and Unsplash [9]. - The company collaborates with over 576,000 content creators and more than 340 content partners, covering over 160,000 news, sports, and entertainment events annually [9]. - Getty Images maintains one of the largest privately-owned photographic archives, with millions of images dating back to the beginning of photography [9]. Technological Advancements - The company is adopting generative AI technologies to enhance its content offerings, allowing customers to create commercially safe visuals through text-to-image generation [10].