Getty Images Holdings, Inc. Q4 FY2024 earnings call

• Merger with Shutterstock: Definitive merger agreement announced earlier in the year, presenting a transformational opportunity. - Refinancing: Completed refinancing of term loans, extending $1 billion of debt maturities to 2030. - Q4 and full year results: Q4 had strong revenue growth and adjusted EBITDA, while full year 2024 saw revenue up 2.5% and adjusted EBITDA at $300 million with a 32% margin. - Operational highlights: Renewed world-class partnerships, produced award-winning news/sport/entertainment coverage, launched natural language search, expanded integrations, rolled out AI capabilities, and grew annual subscribers.

In the fourth quarter of 2024, revenue grew to $247.3 million, a 9.5% year-on-year increase (8.5% on a currency-neutral basis). Full year 2024 revenue was $939.3 million, up 2.5% on both reported and currency-neutral bases. The Americas region, the largest revenue region, saw a 15.9% currency-neutral increase in Q4. APAC was up 0.4% and EMEA down under 1%. Annual subscription revenue in Q4 was 54.9% of total revenue, growing ~11% on reported and currency-neutral bases, with 78,000 new active annual subscribers added. Editorial revenue in Q4 was $90.1 million, up 19% year-on-year (17.7% currency-neutral), while creative revenue was $142.4 million, down 2.4% year-on-year (3.1% currency-neutral) due to a shift to editorial.

2025 revenue is anticipated to be $918 million to $955 million, a drop of 2.3% to a rise of 1.6% year-on-year (currency-neutral down 1% to up 3%). Adjusted EBITDA is expected to be $272 million to $290 million, a drop of 9.5% to 3.3% year-on-year (currency-neutral down 8% to 1.7%). Guidance includes FX impact assumptions, SOX compliance acceleration costs, and impacts from L.A. fires and Hollywood strike lag.

• Regulatory review of the Shutterstock merger. - Volatility in foreign exchange rates. - Macro uncertainty affecting the agency business. - Impact of the Los Angeles fires on production activity.

Q: Good afternoon. Thank you. I think, Craig one for you, and one for you Jenn. So, Craig just generative AI hoping for an update on the consumer uptake that you're seeing and your latest thoughts on how you expect monetization to ramp? And Jenn on the financials, just could you expand a bit on what drove the outperformance in 4Q relative to the guide you gave last quarter on revenue, but especially on EBITDA?

A: Craig Peters: Great. Thanks, Cory. I will take the first and leave the second to Jenn. On the AI take-up, we continue to see take-up of the AI service both on Getty Images and on iStock. I would say, it continues to grow but at a relatively modest pace, which from all accounts seems to match kind of corporate adoption of generative generally in terms of end deployment within the business versus internal deployment within the business. And where we're seeing that take-up is largely with existing customers using the capability not to generate from a text prompt, but to utilize the technology to modify the imagery. And that's been something that has kind of exceeded our expectations in terms of how customers are adopting it and using it. In the fall, we launched the ability to insert products into the imagery. And that's been really received well across the customer base. And it's addressing something that they haven't historically been able to do with our imagery on the creative side of things. And at least do that without significant effort. And so this is something that really simplifies that down. But it continues to be there, but the core value that we continue to deliver is on pre-shop. And we see those two really being complementary with the customer base. And so we're pleased to kind of continue to roll out those capabilities leveraging the technology that really help our customers save time and money. Jenn Leyden: And Cory, I'll take the question on Q4. So, I mean, the good part about the Q4 performance is really it was driven by a strong top line. So you mentioned a bit of improvement on EBITDA. That's really mostly about a drop-through of strong top line performance a bit of favorability on the gross margin side, which is almost always for us a product mix story. And that can vary a bit quarter-to-quarter. But as you know, we're always within roughly that 72% to 73% range. So, some favorability there on margin. And then that top line was a few different things. Obviously, as we move through the year, we continued, as we indicated to see that production side of things start to come back still not quite fully back to pre-strike levels. But for sure, we saw that come back in Q3, Q4 some nice year-on-year comps there, as we comp to the 2023 -- second half of 2023 that was really adversely impacted by the strikes. Event year calendar continued to see some strong momentum from that in Q4 as well as Q3. And we mentioned some of the -- a couple of content deals that included an AI licensing element that also impacted Q4. As we've spoken about before those tend to come with heavy upfront revenue recognition. So a few different things driving revenue, but ultimately that profitability story is a drop-through of strong top line.

Q: Thank you. Good evening, Craig and Jenn. Maybe a three-parter if I could, on the outlook for 2025, just looking for revenue growth by segment, Jenn, I don't know if you can provide a little color there. Also curious, how much data licensing revenue is expected next 12 months? And then, just in terms of your visibility this year, for Agency, Corporate and Media client spend, just if you can compare that to this time last year that would be helpful.

A: Craig Peters: Jenn, do you want to take the first two and I can maybe provide some commentary on the Agency, front? Jenn Leyden: Yeah. Hey Mark, so we don't guide at that segment or product level. Broadly speaking, I think Agency for us we've spoken before we don't anticipate Agency suddenly flipping into a growth part of our business. We'd hope to see, sort of a continued stabilization on that side of things. Media I mentioned we're still not back to pre-Hollywood strike levels. That's more broadly the industry not just us. So probably still a little bit of improvement to go there as we navigate through that, but we do have unfortunately the new impact from the L.A. fires on that segment. So we'll see what that does, but definitely seeing a bit of slowdown delays on the production side of things as it relates to the impact of those fires. And of course Corporate for us, always our biggest opportunity for growth, so we'd expect to continue to see that into growth. On the Data Licensing side, again, there we don't guide to a specific number there. Nothing heroic assumed in our guidance there, a bit of a continuation of the levels that we saw in 2024, which by all accounts is fairly modest but the guidance is not dependent on that becoming a very large piece of our business. Craig Peters: Thanks, Jenn, yeah, low-single digits there. And then, I would say just one of the things that we're watching is we are watching the creative agencies, Mark. Wpp put out their performance for Q4 and for the full year. Their full year Creative Agency part of their business was down about 4%, but their Q4 was down around 6.5%. And so it looked like it got a little softer in Q4. And it seems like that, that we're still kind of processing across the full Agency space, but that seems indicative. So -- which aligns to kind of some of the commentary that Jenn had about our Q4, where we continue to see that portion of our business down. And so we're kind of watching a little bit. Obviously, right now, there is a lot of uncertainty in the macro sense. And so that tends to show up first in the agency side of things. So -- but as Jenn highlighted, we've kind of factored those into our guidance. to our best of ability at this point. But that is typically the area where we see impacts more earlier and more acute where the rest of our business is much more heavily weighted into subscriptions and much more stable in terms of the usage and everything there.