Getty Images (GETY) 7 Nov 242024 Q3 Earnings call transcript

Good afternoon, and welcome to Getty Images' Third Quarter 2024 Earnings Conference Call. Today's call is being recorded.

We have allocated 1 hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Steven Kanner, VP of Investor Relations and Treasury at Getty Images. Thank you.

You may begin.

to Images welcome Earnings Quarter and Call. afternoon, the Third Getty XXXX Good

today's Peters, are and me call Joining on Craig Chief Officer. Jenn Financial Chief Leyden, Officer; Executive

this like Before and and we assumptions and materially highlighted statements. with from the can risks, assumptions, risks, uncertainties on Investor our statements of Private filings release these Act cause forward-looking be within the press the to are these our section call Reform release of will Relations in are statements actual today's Litigation to which These differ in filings XXXX. remind the press we could meaning website and found include would SEC. results at uncertainties you today's of begin, Links Securities our investors.gettyimages.com. subject statements forward-looking various that to These to

we of use performance certain EBITDA, as limitations CapEx During also results rationale they be We flow. adjusted our operational open hand Craig call in the as the Officer, Peters. represent using financial we questions. With our of margin, I believe as underlying measures, discussions your and that, SEC. can financial GAAP over adjusted filings will Executive and found adjusted the each prepared EBITDA will call Reconciliations description, measure, EBITDA with our remarks, Chief we'll less non-GAAP some for of in to the business. non-GAAP information, cash to including our well After our our call our and today, reference measures free non-GAAP for

at of high EBITDA Adjusted you call. currency-neutral positive I up on healthy delivered $XX.X revenue a for growth for million, and across everyone X.X% performance reflect level to before a we reported Unsplash+. on in more third Images, us of came am performance the report X.X% a will and full $XXX.X through and million to you on quarter Getty X.X% complete the today's with the of our takes thank third financial pleased These iStock on and Steven, quarter, and basis. strong Thanks, with Jenn increase touch basis quarter on a results. I basis representing X.X% progress on basis a XX.X%. up results a in of currency-neutral year-on-year a at reported each margin EBITDA joining a

categories, the corporate, Our production opportunity growth and to these drove us, on within in and we of with customer we line team customers. quarter. and to continues media were improvements the front execute improvements, with agency, our In see pleased all across agency

including the Paris as of the therefore, these editorial offering growing higher iStock these period, full to Our saw XX% Unsplash+ the saw for and to than subscription geographic performance, unique subscriptions across markets. business like outstanding content versus and the content customers download, events. and subscribers and and many U.S. from our revenue more revenue major of our of our XX% by events editorial now breadth during and across a run-up differentiated breadth consume LTM more of also offerings election, creative, by With subscriptions the Olympics e-commerce nearly we allocations accounting powered comparable

the renewals see our upsell why core on continue a we these offerings, and driver cross-sell continued our Premium editorial coverage, be While strong these creative of overall high-quality consumption, combination to broad-based, strong offering. highly-differentiated, it strength really can real-time, of pre-shot as and the is in Access subscriptions by delivers the product-level shift this impactful product unique impacted to to opportunity demand for growth revenue attribution This customers. our This in back showcases content. of with subscription

product trust Getty Mitsubishi leveraging success that in saw great examples archive. Citi, and global brands their Motors, In unique to also commercial see quarter. and Prime Custom historical be activations offering. the It engine to such within quarter, Content is brands the by content we many offering Images brand-specific cross-selling to one our XM Custom of the of as One continue needs we see Content. Video HSBC, of was via our was Asahi just

continue demonstrated QX by On Venomize we to a Unsplash+, a to to latest our QX. the renewal pleased of website with AI high-quality privacy, on AI pleased of is API and activation sustained front, fine-tuned iStock growth for support renew creative with demand allows pre-shot, builder, we Pictures like core, at brand our Venom are but offerings. fun, help announce the safe through This way. Back we responsible were on also integration its that built with an the safety in fans series. in promotional and to Canva in to our activation partnered see consumer our with use integrations. My commercially-safe, strong of continuing Squarespace. custom Pet, in that, Sony to content content their launch generative branded only release And responsible We We not brands interact model, and

the to year incredibly XXXX, confident As I'm and in closing out into look we ahead our trajectory.

on commitment and with turn all I'll it Jenn. providing customers strengths durable to to value of our our over our going to I'm offerings forward. And to further continue through excited to execution differentiation, success. our drive that, capitalize will Our

and an to XX%. build of growth revenue margin adjusted strong north EBITDA continue momentum, We positive delivering

agency, X are all mentioned, of Unsplash+ and in Images, Craig our Getty industry categories, growth. in iStock corporate, As are growth. media and

is our with comprises half quarters Our of e-commerce annual north QX on high-double annual of to subscription revenue, of adding business count, digit growth consecutive X total thriving. our business subscriber and

performance. strength a high-quality, financial business with our being testament be a as execute the the have and to across our to about event editorial would fact is, we differentiated, both steadfast about this or And editorial at our is easy content creative with focus very our momentum robust compares quarter's quarter the the strike calendar. core our results of customer the this post-Hollywood and to powerful But ability it business. only our to Now, of misinterpret

results. currency-neutral year-on-year saw of those a largest $XXX.X than APAC health geographies, increases basis. million, resiliency continued X.X% in growth of down X.X% on with and X.X% into currency-neutral our we dive on is Revenue growth less Across across this X%. Underpinning basis, region, or was the in and strong many our major Americas, our X.X%, revenue Let's EMEA a of KPIs.

And business, execute LATAM EMEA, was XX.X% comparable annual our by added iStock our growth targeted and the with customers our revenue APAC. total growth e-commerce in XX,XXX from plans Our revenue. continue on we brand-new period. geographic approximately markets XXX,XXX, XX,XXX to annual Unsplash+. and driven reach subscription to XX% Subscriber We was approximately of an of subscribers over increase LTM growth active

up was XXXX XX.X% to has editorial driven quarter Relative Our adding at retention a XX.X% LTM years primarily revenue, on rate LTM of from from LTM 'XX to to as essentially 'XX, in our decline quarters XX.X% year-on-year company to are the start of million, XX.X% events lower-retention around who annual the the revenue editorial the This QX in contributor driven described consistent to flat coming to is to an impact what LTM of with a lift period returning subscribers, retention At XX.X% downloads in major during period, growth down corresponding at revenue lower attachment X% primarily rates. return seeing QX growth growth XX from for core were subscription 'XX X revenue growth QX stabilize, and impact. the smaller basis. Hollywood period, was of QX QX period. Editorial of LTM from revenue. currency-neutral from the but our approximately begun equating e-commerce after is even to to XX.X% Paid XX.X% our with year. while year-on-year to the second by rose million, 'XX. That a is decline, rate XX.X% total strike's previously video momentum. We've out approximately tend our XX% and up X% $XX.X total LTM in from in consecutive increase we this in revenue, straight X/X by a editorial our in

business, revenue creative an some strong actually concentration Craig this major When to growth in to by agency a mentioned, consumption our XX towards quarter, largely to driven editorial has revenue shift This signals which basis returned the our results, Access and decline a independent allocation fixed editorial for $XXX.X large with year-on-year value which X.X% will year-over-year I impact on growth you X.X% impact the spoke by to X% decrease basis, in was just been compares, the an our sustained for year-on-year the However, year-on-year of million, increase with of and we good agencies. that adverse driven contributed those Premium coverage. growth, with quarters, the to a I points given content touch and strike Access in editorial, a growth as subscription in impact with recognition the on performance lift include revenue currency-neutral on for of consumption XX currency-neutral revenue are in on shift and creative a X.X with higher QX, event next. Creative both within reporting across shift impact networks in of differences, a approximately result editorial as having X.X% points. revenue and a subscriptions account due Premium down with inverse consecutive shift which past is

XX% on positive deliver efforts both results and reported currency-neutral and with acquisition approximately iStock basis annual customer a growing Our Unsplash+ growing to our subscriptions continue triple digits. subscription a

to existing see AI and where of or category growth received of XXX of the basis X-year for content business, in for recognition ASC approximately on included million types some be we evenly distributed to smaller of with attributed continues XXX% flow recurring $XX.X with expanded these term, currency-neutral. Other XX% over a which rights, aligning Despite much QX elements X-year up e-commerce customer, heavy an $X.X accelerated an recognition, revenue, represents us, revenue guidelines. X.X% on creative was our and This cash longer-term total importance a an is Our accordance upfront which from we creative level X.X% the was deals. very positioning million, will revenue increase 'XX. revenue, historically can of which reported revenue deal the about to grow

as While our a consistently of creative cost QX revenue very of content our this power we from XXXX. our strong customers, from commitments is less revenue deal. Revenue remained at see unchanged in sits of at heart of this QX, percentage of the just one large the XX.X% many

this XX of $XXX.X components quarters, the indeed, $XX.X of XX last for We was of in model. Total XX% metric compelling our year. expense from in and million one business QX, up most resilient have the prior million SG&A the north seen be of

quarter. the our primarily rate rate revenue expense increase compensation As lower expense The lower year. a stock-based driven last from in was was XX.X% the percentage in revenue, of XX.X%, down by and

SG&A the our the as strong EBITDA the Images. Adjusted and million stock-based in was in revenue in $XX.X revenue year-over-year to this revenue X.X% the prior operating Adjusted we in Motorsport EBITDA as was showed a $X.X of currency-neutral in $XX.X as million, a inclusion from related million million million changes the we year-over-year. XXXX. Hollywood of QX entered across million an $XX.X up reinvestment of navigated paid. increase a QX following working million and million up cash taxes cash an and taxes $XX and cash X.X% quarter quarter, prior payables, cash but of of over expense cash the with strong. CapEx The The XX% revenue, balance X.X%, as for XX.X%, receivables Excluding planned rose XXXX. is flow year. Cash flow finished in of the million staffing increase costs well $X.X million is was $XX.X sheet in the XXXX. We net on acquired margin up tied of in in XX.X% QX expense incredibly down and or compensation, well year-on-year The CapEx million reflects from marketing, over increase commissions timing million interest $X.X QX the generated as decrease million from still or to $XX.X to of recently quarter $XXX.X interest XXXX of a XXXX, $XX.X in $X.X higher percentage year. Free of of basis. lower from down for spend XX.X% strike higher business of down voluntary flow debt and the applied quarter QX as was were primarily and reflects free balance from in impacts million slightly down a QX compared 'XX million, voluntary X.X% XXXX, deficit cash, debt continued in $X.X to the performance cash quarter pullback spend as paydown, net have debt leverage. to demonstrating Year-to-date, for the cash Free $XX.X we in quarter. $XX.X $XX.X commitment million down our stated XXXX. repayment third our capital towards pay QX QX, net the reduce

XX, As of euro we as million which $XXX.X of total XXXX applicable using billion, converted of exchange X.X%. rate of with debt term X.XX%; term USD applicable $XXX million XX, loan rates had of included: an X.XX% outstanding loan, with September million of of senior $X.XX an $XXX.X September notes; rate

Our We $XXX unchanged million from ended revolver leverage with X.Xx, a remains undrawn. quarter the QX. of net

a deleverage continue balance estimated XX, interest million. we to cash is continuing our September our remain rates refinance explore be I to foreign ago, approximately As balance our cash of debt. Based and on generation XXXX applicable moment will to rates utilize and to we expense further as to on to interest mentioned $XXX flow strong committed opportunities our the sheet, debt the exchange

Now, consideration representing to $XXX the Taking turning X.X%, million, rates, $XXX reported X.X% current of to to X.X% growth currency-neutral. full our year we increasing year-on-year financial million year-to-date our our the or revenue outlook guidance impact to performance X.X% to FX range and XXXX. are for into of

adjusted We an to this consistent our remainder the of year. In we fiscal to on also discipline the currency-neutral. summary, GBP of the EBITDA to translates FX execution, rates to in with that X.X% those down are X.X%, note, includes X.X% X.X% investing to million, growth XXXX, our Please November driving line at for remain increasing top at and which while with $X.XX or million year are full year-on-year committed a $XXX to decrease and of X, as debts. assumption business, strong $XXX strategically the $X.XX euro our and guidance maintaining paying range

XXXX quarter operator, our As of we look about for the we excited beyond. With and fourth prospects open are ahead, questions. that for please the call

Lavigne your Company. from comes question from Alex And first instructions] [Operator The Benchmark

Alex This me. ones Mark. quick for for is Two on

an Just curious in clients opportunities, as alongside adoption revenue. broadly see GenAI just competitive of as there then, licensing could well. on or the you think And in curve perhaps the curious if demand update you not if how scaling update separately, take or not you provide could balanced and advantage to is considerations you an provide whether front, testing phase that whether about the data 'XX obvious remain against

So, X. on just those curious

those. Alex. the Appreciate Thanks, I'll take question.

cross-sell And to to note of our we continue still front, The expect imagery of adopting we'll overall over see It an the business of incremental using those that would more services them GenAI services to But offerings to capabilities. traditional of to percentages based and ability the think where business ] into of from the just products we're to to the we're our to launched, that be pre-shot is offerings, is contributor. -- to into customers customers the pre-shot the that seeing imagery we we product-based we're which AI. interesting seeing opportunity is but that nice. pre-shot new our that we these in good haven't single-digit modify business. that to material it's packages, its creative. obviously, generative XXXX, in a say, order AI a On are the coming model, our as it into out of take-up. that take-up I that we've continue the in to the launched We're start from [ also become demand early to one customers is these We've recently, adoption integrate AI additive off our brands stand-alone. websites. or capabilities pre-shot Most the been the stand-alone generative seeing merits utilize the actually insert launched existing

the that aren't more nature. So of recurring those business, going activations business But the those Clearly, in but relationships be days. with created material capabilities, those companies, believe I as the deep out where on I'd early fine-tuning and our capabilities just the to and and to not are as into to bear. promotion, deals do I they for tool our of lot in movie terms interesting going say, our those bring we've a a there's mentioned and there are Venom but offered, still deal like

I product insert the So, features more think that product of we'll capability week. from over see AI those more activations your to -- contribution and more and XXXX get types out out as out last continue we roll just rolled like we

are some We've on with bit partner interest of that's Those existing deals ours. to that business announced On the over long-standing deals licensing partner. data we of the licensing again, aligned of deal interest every We've QX, we data And the -- are creators done a in not side of a it. an of we belief that's small Jenn will do that with touched little the in where out data haul. long licensing have QX, things, done there. an the existing and our

relevance We large to AI, we've services simple cases, many lot don't market of jointly we with and alternative. it's then that have think of place, of In a companies on the the is align or generative not AI models big a to world number our partnered them interest There's as to all bring applications to of video. to and long-term has develop and this again, creators. deals of passed But content company an our quality that. and imagery about and just to a metadata

that on our and aligns we to you'll the but ultimately one to and continue to interest the accretive think highly of creators. continuing the again, data view licensing, long-term expand a is on see I think very business to So have us that

concludes and this time, questions. other conference. this the Ladies we no have gentlemen, At

You now disconnect may your lines.

you. Thank