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]