Getty Images Holdings, Inc.

Before we begin, we would like to note that due to the ongoing regulatory review process, we will not be able to comment on the status of the merger with Shutterstock or the first quarter 2025 Shutterstock operating results. We appreciate your understanding and will share updates as soon as we are able. This call will include forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These statements are subject to various risks, uncertainties, and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are highlighted in the forward-looking statement section of today's press release and in our filings with the SEC. Links to these filings and today's press release can be found on our investor relations website at investors.gettyimages.com. During our call today, We will also reference certain non-GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA less capex, and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe that they represent our operational performance and underlying results of our business. Reconciliations of GAAP to non-GAAP measures, as well as the description, limitations, and rationale for using each measure can be found in our filings with the SEC. After our prepared remarks, we'll open the call for your questions. With that, I will hand the call over to our Chief Executive Officer, Craig Peters.

Craig Peters Thanks, Stephen, and thanks to everyone for taking the time to join us today. I'll begin with a high-level view of the quarter, after which Jen will add more detail on our performance. First quarter revenue for 2025 was $224.1 million, representing growth of 0.8% or 2.6% on a currency-neutral basis. Adjusted EBITDA was $70.1 million for the quarter, down 0.1% or up 2.2% on a currency-neutral basis. We continue to see growth in our annual subscription business driven by our corporate sector, which remains in steady growth, with gains across premium access and Unsplash Plus, and with strong demand for video, news, and sport. As expected, our revenue was impacted by early FX pressures, which have since reversed. Tariff-driven uncertainty impacting customers' investment and continued softness in our agency, production, and entertainment sectors, the latter due to impacts from the LA fires. We delivered a strong start to the year in our sport business, where we are a trusted strategic partner across the full spectrum of the sports ecosystem. WWE, Major League Soccer, and the National Women's Soccer League all signed as new exclusive partners, while we renewed our longstanding partnership with UEFA. Additionally, the Formula One Series launched its 75th anniversary season, where we hold an official designation for the series itself along with the commercial relationships with teams including McLaren, Red Bull, and Aston Martin. Our industry-leading sports operation and commercial teams, photographic talent, and global distribution platform make Getty Images the partner of choice and therefore the premier destination for photographic coverage around this landmark year. In entertainment, our expert production team partnered with the Academy of Motion Picture, Arts, and Sciences, the Elton John AIDS Foundation Oscar Party, the Vanity Fair Oscar Party, Grammys, and BAFTA, to name a few. In the quarter, we also renewed content partnerships with Boston Globe, MTV, and welcomed new video partner, Bader Media. Our custom content solution continues to be popular with customers across different sectors who value the hands-on experience of this team, and data-backed visual insights which produce visuals targeted for the customer's specific needs. This level of targeted content production is unique to Getty Images and one of the reasons companies like 3M and Fujitsu are repeat customers of this product. Finally, I'm proud to see our expert photographers recognized by industry peers across a range of categories and award ceremonies during the quarter. the team was honored with 115 awards of excellence in categories including news, sport, and politics at ceremonies such as the White House News Photographer Association Awards, the SJA British Sports Journalism Awards, NPPA's Best of Photo Journalism Awards, and World Press Photo. Award-winning talent, prestigious partnerships, unique access, Deep expertise embedded across our staff and our exclusive contributors, comprehensive coverage and archive, long-standing customer relationships, and a high-quality e-commerce offering are all at the core of our durable business and what sets Getty Images apart. In terms of the proposed merger with Shutterstock, we received a request for additional information from the DOJ in the U.S. and the CMA in the U.K., Neither of these was unexpected given the nature of these regulatory processes. In the months ahead, we'll continue to work with the regulators to obtain all necessary approvals, and we continue to expect the transaction to close in the second half of 2025. Looking forward, our experience has shown that we can navigate challenging environments. By remaining flexible and financially disciplined, and with an annual subscription business that represents more than half of our revenue, we're positioning the business to adapt to the potential macro uncertainty ahead. Our first quarter results are largely in line with our expectations, and we feel good about the start to the year, even with some of the challenges in the first quarter. As we look out to the remainder of the year, we remain on track to deliver our 2025 outlook. Through it all, including the ongoing macroeconomic uncertainty, we're committed to investing in the core assets of our company, and continue to evolve our offering in ways that deepen our relevance for our customers. With that, I'll turn the call over to Jen to take you through the more detailed financials.

Our Q1 results reflect a solid yet challenging start to the year. As anticipated and discussed on our Q4 earnings call, the Los Angeles fires, early FX pressures, and the broader macro uncertainty impacted our first quarter results. That said, we focused on executing through these challenges and delivered low single-digit top-line growth combined with a healthy adjusted EBITDA margin. Q1 revenue was $224.1 million, with year-on-year growth of 0.8% or 2.6% on a currency-neutral basis. Included in these results are certain impacts of the timing of revenue recognition which contributed approximately 320 basis points to Q1 growth. Annual subscription revenue was 57.2% of total revenue in the first quarter, up from 54.7% in Q1 of last year, and also up from 53.8% in 2024. In total, subscription revenue grew by 5.4% or 7.2% on a currency-neutral basis, driven primarily by growth in our premium access offering. We added 56,000 active annual subscribers to reach 318,000 in the Q1 LTM period, an increase of approximately 21% over the comparable LTM period in 2024. driven by our e-commerce businesses, iStock and Unsplash Plus. Of the 318,000 annual subscribers in the LTM period, 53% were brand-new customers and 28% were customers in our growth markets across LATAM, APAC, and EMEA. Our annual subscription revenue retention rate was 92.7% in the Q1 LTM period. up from 90% in the corresponding 2024 period. Paid downloads were down slightly at 93 million, while our video attachment rate remains in steady growth, rising to 16.7% from 14% in the Q1 2024 LPM period. Editorial revenue was 82.6 million, an increase of 4% year-on-year and 5.6% on a currency-neutral basis. Key growth drivers in this quarter included our coverage of global news events and sports. Our entertainment business was down due to the impact of the LA fires, while the archive was flat. Creative revenue was $132.2 million, down 4.8% year-on-year and 3% on a currency-neutral basis. Within creative, we saw strengths across our premium access subscriptions, demand for video, and continued growth in Unsplash Plus. While our corporate business continues to perform well, our agency business, which is accounted for entirely within creative, was down high single digits due primarily to declines at the large network agencies. Being an almost entirely a la carte business, Agency is where we usually see a slowdown in spending and investment as agency customers navigate periods of potential macroeconomic uncertainty. Our media business saw a mid-single-digit decline, primarily due to the impact of the LA fires on our broadcast and production customers. This pullback, which is reflected across both creative and editorial, had the largest impact in the first two months of the quarter. with the media segment returning to growth as we exited the quarter. Other revenue was $9.3 million, an increase of $5.3 million from Q1-24, driven primarily by two new multi-year creative content deals that included some level of AI rights with heavier upfront revenue recognitions. Across our major geographies, we saw currency neutral revenue growth of 6.4% in the Americas, which is our largest region with respect to revenue, while EMEA was down 3% and APAC was down less than 1%. Revenue lesser cost of revenue as a percentage of revenue was consistent and strong at 73.1% in Q1, compared with 72.9% in Q1 2024. SG&A expense was 98.3 million, down 2.7 million year on year, with our expense rate decreasing to 43.9% of revenue from 45.4% last year. The lower expense rate was due primarily to a 4.6 million decrease in stock-based compensation. Excluding stock-based compensation, SG&A increased to 93.7 million in the quarter, or 41.8% of revenue, up from $91.8 million, or 41.3% of revenue, in Q1 2024. The increase in spend primarily relates to professional fees incurred for ongoing litigation with Stability AI. However, that spend was in line with our expectations for the quarter. Adjusted EBITDA was 70.1 million for the quarter, down 0.1%, or up 2.2% on a currency-neutral basis. Adjusted EBITDA margin was 31.3%, compared to 31.6% in Q1 2024. CapEx was 15.7 million, up 1.3 million year-over-year. CapEx as a percentage of revenue was 7% compared to 6.5% in the prior year period. This increase was driven by the timing of the payment of 2024 performance compensation, a portion of which is capitalized. Q1's CapEx remained within our expected range of 5% to 7% of revenue. Adjusted EBITDA less CapEx was 54.4 million, down 1.3 million year-over-year, representing a decrease of 2.4% or an increase of 0.5% on a currency-neutral basis. Adjusted EBITDA less CapEx margin was 24.3% in Q1, compared to 25.1% in Q1 2024. Free cash flow was negative $300,000, down from $7.1 million in Q1 2024, primarily due to the impact of cash outflows tied to merger-related expenses. Free cash flow is stated net of cash interest expense of $38.2 million and cash taxes paid of $4.6 million in the first quarter. We finished the quarter with $114.6 million of balance sheet cash down $19.6 million from the ending balance in Q1 2024 and down $6.6 million from Q4 of 2024. The lower cash balance relative to Q1 2024 is due to $55.2 million of voluntary debt paydowns executed over the past 12 months and $12.5 million of financing outflows related to the refinancing of our term loans. As just mentioned, during the quarter we completed the refinancing of the existing term loan structure, replacing our old term loans, which were set to mature in February of 2026, with new loans now maturing in February 2030. As of March 31st, we had total debt outstanding of $1.36 billion. including 300 million of 9.75% senior notes, 580 million of USD term loans at 11.25% fixed rate, 476.1 million of Euro term loans converted using exchange rates as of March 31st, 2025, with an applicable rate of 8.375%. We also have a 150 million revolver that remains undrawn. We ended the quarter with a net leverage of 4.1 times compared to four times at the end of 2024. That slight uptick in net leverage primarily reflects the impact of the February refinancing and the impact of the weaker dollar on the value of our Euro term debt. We continue to assess market conditions with respect to any potential refinancing or redemption of the 300 million of bonds. Considering the foreign exchange rates and applicable interest rates on our debt balance as of March 31st and factoring in the new mandatory amortization on the Euro term loan, our estimated cash interest expense for 2025 is 133 million. In summary, we ended the first quarter with positive operating metrics and a healthy and growing annual subscription business, which helps to mitigate some of the potential impacts from macroeconomic volatility. We continue to see opportunities to build positive momentum, expanding our customer base, our annual subscription business, and our geographic footprint, and driving greater video consumption. Now turning to our outlook for the full year 2025. Taking into consideration the impact of the weaker dollar and assuming full year 2025 FX rates with the Euro at 1.10 and the GDP at 1.30, we are updating our guidance for FX with impacts as follows. We anticipate revenue of $931 million to $968 million, down 0.9% to up 3.1% year over year. On a currency-neutral basis, this represents a decrease of 1% to an increase of 3%. This remains unchanged from prior guidance. As you think through the cadence for the year, we would expect to see growth trends from Q1 continue into Q2, with tougher comparisons flattening growth in the back half of 2025. The update to our guidance reflects the $1 million impact from FX, inclusive of the $3.8 million headwind in the first quarter, which will be offset by a benefit for the rest of 2025, including an estimated $1.4 million in the second quarter. We expect adjusted EBITDA of $277 million to $297 million, down 7.6% to 1.2% year over year, or down 7.9% to 1.4% currency neutral. Included in the adjusted EBITDA expectations is a similar cadence for the estimated FX impact. With an approximate 0.5 million tailwind in 2025, inclusive of the 1.6 million headwinds from the first quarter, offset by a tailwind across the remainder of the year, which includes an estimated 0.5 million in the second quarter. Please note this guidance includes the anticipated impact of the odd year versus even year editorial event calendar comparison, as well as the impact from disruptions in production activity due to the LA fires, and some continued lag in a return to pre-Hollywood strike production levels. Additionally, the second half of 2025 faces tougher year-on-year comparisons, given the year-on-year lift in performance post-strike during the second half of 2024. On the cost side, our guidance continues to include approximately $8 million in one-off increases in SG&A, which were disclosed during our Q4 earnings call. which will be largely concentrated in the Q2 to Q4 periods as we accelerate our SOX-compliant efforts in 2025. Please note all other merger-related costs are not included in this guidance as they are considered one time in nature and therefore excluded from adjusted EBITDA. Finally, any potential broader impacts which may result from the trade wars and other global macroeconomic conditions remain unknown and may not be fully reflected in this guidance. With that, operator, please open up the call for questions.