Getty Images (GETY) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, revenue grew to $247.3 million, representing a 9.5% increase or 8.5% on a currency-neutral basis [9][18] - For the full year 2024, revenue was$ 939.3 million, an increase of 2.5% on both reported and currency-neutral basis [10][18] - Adjusted EBITDA for Q4 was $80.6 million, up 11.7% year-over-year, with an adjusted EBITDA margin of 32.6%, up from 31.9% in Q4 2023 [28][29] - Full year adjusted EBITDA was$ 300 million, with a margin of 32% compared to 32.9% in 2023 [29] Business Line Data and Key Metrics Changes - Annual subscription revenue accounted for 54.9% of total revenue in Q4, growing approximately 11% on both reported and currency-neutral basis [19] - Paid downloads decreased slightly to $93 million, while video attachment rate increased to 16.5% from 14.1% in Q4 2023 [21] - Creative revenue was$ 142.4 million, down 2.4% year-on-year, primarily due to a shift in download consumption from creative to editorial [22][23] - Editorial revenue increased to $90.1 million, up 19% year-on-year, driven by major events [21] Market Data and Key Metrics Changes - The Americas region saw a revenue increase of 15.9% in Q4 on a currency-neutral basis, while APAC was up 0.4% and EMEA down just under 1% [18] - The corporate segment remains the largest growth opportunity, while Agency is expected to stabilize without significant growth [60] Company Strategy and Development Direction - The merger with Shutterstock is viewed as a transformational opportunity, aimed at creating superior value for customers and shareholders [8] - Continued investment in core assets and partnerships, along with the launch of new AI capabilities, is part of the strategy to enhance customer value [14][15] - The company aims to reduce leverage and increase margins and cash flow through the merger [15][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future despite challenges such as the Los Angeles fires impacting production [15] - The company anticipates revenue for 2025 to be between$ 918 million and $955 million, reflecting a slight decline to modest growth [40] - Adjusted EBITDA for 2025 is expected to be between$ 272 million and $290 million, indicating a potential decline year-over-year [41] Other Important Information - Free cash flow for Q4 was$ 24.6 million, an increase from $18.6 million in Q4 2023, while full year free cash flow was$ 60.9 million, down from $75.7 million in 2023 [32] - The company completed a refinancing of term loans, extending maturities to 2030, which includes$ 1 billion of term loans outstanding [36][37] Q&A Session Summary Question: Update on generative AI consumer uptake and monetization - Management noted that AI service uptake is growing modestly, primarily among existing customers using technology to modify imagery [48][49] Question: Factors driving Q4 outperformance relative to guidance - The strong Q4 performance was attributed to a robust top line, improved gross margins, and recovery in production post-strikes [51][53] Question: Outlook for 2025 revenue growth by segment and data licensing revenue - Management does not provide specific segment guidance but expects continued stabilization in Agency and growth in Corporate [60][62]