Financial Data and Key Metrics Changes - Q2 2025 revenue was $234.9 million, representing a year-on-year growth of 2.5% or 1.8% on a currency neutral basis [4][12] - Adjusted EBITDA for the quarter was $68 million, down 1.2% reported and 2.2% on a currency neutral basis [4][17] - Free cash flow was negative $9.6 million compared to positive $31.1 million in Q2 2024, primarily due to cash outflows related to merger and legal expenses [19] - The company finished the quarter with $110.3 million in cash, down $11.4 million from Q2 2024 [19] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 53.5% of total revenue, up from 52.9% in Q2 2024, with a growth of 3.7% or 3% on a currency neutral basis [12] - Annual subscriber count reached 321,000, representing a growth of approximately 14% over the comparable 2024 period [13] - Paid downloads decreased slightly to 93 million, while video attachment rate increased to 16.7% from 15.6% in the prior year [14] - Editorial revenue grew by 5.6% year-on-year to $88.3 million, driven by strong demand for news and sports coverage [15] Market Data and Key Metrics Changes - Revenue growth in The Americas was 7.2% on a currency neutral basis, while EMEA was down 6% and APAC down 1.1% [16] - The agency business faced challenges, with a 10% decline in Q2, impacting overall creative performance [14][11] Company Strategy and Development Direction - The company continues to focus on expanding its subscription business and enhancing its AI capabilities, which are integrated into its image subscriptions [8][9] - The merger with Shutterstock is progressing, with shareholder approval received and regulatory reviews ongoing [10][9] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainty and challenges in the agency business but expressed confidence in the corporate and media segments [11] - The company anticipates tougher year-on-year comparisons in the second half of 2025 due to the impacts of the Hollywood strikes and production disruptions [22][23] Other Important Information - SG&A expenses increased to $105.1 million, primarily due to professional fees related to compliance efforts and ongoing litigation [17] - Adjusted EBITDA less CapEx was $51.9 million, down 3% year-on-year [18] Q&A Session Summary Question: Comments on strength in corporate media relative to subscription results - Management indicated that the creative decline is primarily due to agency challenges, while corporate and media segments are performing well [26][28] Question: Clarification on agency weakness versus a la carte strength - Management clarified that agency weakness impacts a la carte performance, and editorial a la carte continues to perform well [32][34] Question: Drivers of subscription mix shift and retention rate increase - Management highlighted growth in e-commerce subscriptions and noted that retention rates are stabilizing, particularly in Premium Access [38][42] Question: Update on litigation with Stability AI - Management explained the strategic differences in litigation between the US and UK, emphasizing ongoing efforts in the US case [40][46]

Financial Data and Key Metrics Changes - First quarter revenue for 2025 was $224.1 million, representing growth of 0.8% or 2.6% on a currency neutral basis [4][11] - Adjusted EBITDA was $70.1 million for the quarter, down 0.1% or up 2.2% on a currency neutral basis [4][16] - Annual subscription revenue accounted for 57.2% of total revenue, up from 54.7% in Q1 of the previous year [12] - Free cash flow was negative $0.3 million, down from $7.1 million in Q1 2024 [18] Business Line Data and Key Metrics Changes - Subscription revenue grew by 5.4% or 7.2% on a currency neutral basis, driven primarily by growth in premium access [12] - Paid downloads decreased slightly to $93 million, while video attachment rate increased to 16.7% from 14% [13] - Editorial revenue increased by 4% year on year to $82.6 million, while creative revenue decreased by 4.8% year on year to $132.2 million [13][14] - Other revenue increased to $9.3 million, driven by new multiyear creative content deals [15] Market Data and Key Metrics Changes - Currency neutral revenue growth of 6.4% in The Americas, while EMEA was down 3% and APAC was down less than 1% [15] - The company experienced a mid single-digit decline in its media business, primarily due to the impact of the LA fires [14] Company Strategy and Development Direction - The company is committed to investing in core assets and evolving its offerings to deepen relevance for customers [10] - The annual subscription business represents more than half of total revenue, positioning the company to adapt to potential macroeconomic uncertainties [9] - The company is focused on expanding its customer base, annual subscription business, and geographic footprint [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged early FX pressures and tariff-driven uncertainty impacting customer investments [5][11] - The company expects to navigate challenging environments by remaining flexible and financially disciplined [9] - Guidance for full year 2025 anticipates revenue of $931 million to $968 million, reflecting a decrease of 0.9% to an increase of 3.1% year over year [21] Other Important Information - The proposed merger with Shutterstock is under regulatory review, with expectations for closure in the second half of 2025 [8][9] - The company completed refinancing of its term loan structure, extending maturity to February 2030 [19] Q&A Session Summary Question: Can you elaborate on the subscription mix shift to corporate and the demand perspective? - Management noted a continued trend of building internal corporate marketing groups, which drives subscription growth [28] Question: Are the impacts from LA fires, FX pressures, and broader macro uncertainties resolved? - Management confirmed that while some impacts are expected to continue, they have baked these uncertainties into their guidance [33] Question: What is the expected acceleration in currency neutral guidance and data licensing revenue? - Management indicated no significant changes in data licensing revenue expectations and noted growth opportunities in subscription and video [44] Question: Can you provide an update on the company's Gen AI offering and client adoption? - Management reported consistent adoption of Gen AI offerings, with revenue still in the single-digit millions but growing steadily [54] Question: How has client spending been affected by tariff uncertainty since Liberation Day? - Management observed a decline in agency business, attributing it to macro uncertainties rather than direct tariff impacts [58]