Getty Images (US:GETY)2024-05-12 00:46Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $222.3 million, representing a year-on-year decrease of 5.7% on both a reported and currency-neutral basis [14][26] - Adjusted EBITDA was $70.2 million, down 7.9% reported or 7.7% currency-neutral, representing 31.6% of revenue [15][28] - Annual subscription revenue accounted for 55.4% of total revenues, up from 50.7% in Q1 2023 [26] - Free cash flow was $7 million in Q1, down from $16.4 million in Q1 2023 [37][38] Business Line Data and Key Metrics Changes - Corporate business remained in growth in Q1 2024, while agency business experienced low double-digit declines [5][30] - Annual subscription revenue within Creative was up 7.7% on both a reported and currency-neutral basis [27] - iStock annual subscriptions grew over 27% on both a reported and currency-neutral basis, marking the 11th consecutive quarter of double-digit growth [27] Market Data and Key Metrics Changes - Total purchasing customers decreased to 769,000 from 829,000 in the comparable LTM period [31] - Revenue in the Americas decreased by 9.4%, while EMEA and APAC saw decreases of 0.2% and 2%, respectively [36] - The video attachment rate rose to 14% from 13.4% in LTM Q1 2023, indicating steady year-over-year growth [33] Company Strategy and Development Direction - The company is focused on expanding its generative AI offerings in partnership with NVIDIA, including custom fine-tuning capabilities for enterprise services [20][21] - The acquisition of Motorsport images is expected to enhance the company's offerings in the motorsports sector [15][17] - The company aims to return to growth in 2024 as headwinds turn into tailwinds, particularly in the second half of the year [23][40] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic challenges and residual impacts from the Hollywood strikes affected Q1 performance, with expectations for normalization in the second half of the year [14][47] - The company remains confident in its ability to return to growth, with guidance for 2024 revenue between $928 million and $947 million [41][42] - Subscriber retention rates are expected to improve over time, particularly as the company upsells to new customers [48][49] Other Important Information - The company received over 40 awards of excellence in various categories during the quarter, highlighting its industry recognition [19] - The company is actively managing its debt, with a net leverage of 4.2x at the end of Q1 [38][39] Q&A Session Summary Question: Can you discuss the progress post-Hollywood strikes and when normalization might occur? - Management expects some slowness to continue into Q2, with a return to normal levels anticipated in the second half of the year [47] Question: Can you elaborate on the subscriber retention rate and its future trends? - Management indicated that the retention rate is currently at 90% but is expected to improve as the company upsells to new customers and as macro conditions stabilize [48][49]