Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to Getty Images First Quarter 2023 Earnings Conference Call. Today’s call is being recorded.

We have allocated one hour for prepared remarks and Q&A.

At this time, I would like to turn the conference over to Steven Kanner, VP of Investor Relations and Treasury at Getty Images. Thank you.

begin. may You

Steven Kanner

welcome earnings and Getty first Images Good to XXXX call. quarter afternoon the

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

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

we neutral they certain EBITDA, CapEx, During also in discussions currency and adjusted our evaluate believe We of that as in our to we understanding margin, financial investors some financial adjusted the free adjusted management EBITDA will call operating EBITDA less results use non-GAAP core growth information, uses flow including business. the measures assist today, reference rate. cash non-GAAP

we’ll limitations non-GAAP the well measures remarks, of can Reconciliations to call GAAP for as and the for questions. using found our open as After filings prepared SEC. our description, in rationale your be measure each with the

to call Chief Peters. the that, Officer, over our I hand will With Executive Craig

Craig Peters

before through quarter progress at the earnings business and Thanks, joining high Getty results. by call. level Steven, our XXXX first I’ll Images thanks start Jen financial quarter’s the and quarter addressing for you to performance first takes a everyone

X% neutral $XXX.X reported growth year-on-year of and XXXX revenue X.X%. million, representing quarter First currency growth was of

currency reflects adjusted reported a decrease EBITDA of year-on-year X% a This for over quarter. X.X% finished and on basis. million neutral growth Our of $XX the just at

bottom half As impact of anticipated accounted first the headwinds currency our XXXX line. we for guidance, to through in our

However, of prove over the significantly half we anticipate second year. the this will

business, reflect Top believe Europe continued spend line and some results softness is our macro customers, more customers cautiously we challenging some agency due to approaching parts notably in of the in environment. in which

e-commerce iStock LTM thriving behind is in XX,XXX in the net total engine with growth our well perform customers that continues and purchasing Our totaling quarter. to performance the additions

Unsplash+ the paid customer QX continues to renewals. signs respect acquisition, subscription XXXX utilization we and show launched to in with positive

of the customers total increased Our paid X.X% stills our from are growth our year-over-year downloads and and and creative increasing from contributions each value coming deriving our to with speaks This by to from offerings. editorial from brands, video.

we course, pleased consumption quarter, is and Of unique The believe exclusive our content content renew offering. the and our our coverage were of increased the Gala recent Met of coordination uniqueness more distribution. commitment Sky and underpinned of Charles quality Coronation to Anadolu. long-standing In and demonstrate partnerships King with the also by News and we capabilities III

with text-to-image During quarter, and we our announce generative develop to offerings. distribute responsible were NVIDIA collaboration and the to text-to-video pleased

addresses collaboration revenue in to context durable and respect technology of the models AI. current this to concerns with the generative building We to are recurring generative of of many this committed and new assets Images uniqueness the Getty streams with speaks

and bring quarters and over contemporary our to the high Getty metadata, of a NVIDIA, unique In forward maintain these ongoing with time. rights level Images of of delivers quality level of quality over the collective collaboration customers. responsible exclusivity flow level new a we respect and and coming commercializing a content expertise models to and these to AI to research capabilities improve models look to content with

with resolution, of subscribers. deployed on continues respect maintain In removal quality, to functionality distinct the building BRIA, time our AI efficiency, partnership responsible leveraging advantages iStock to our pre-shot one-click with to of search all which Further core and we background strengths model, costs. and

We’re seeing they be second need quarter. time during these and budget with expanding our increased initial These the image object integrated efficiency. get removal to capabilities customers adoption we’ll exact to and the strong capabilities allow

an we a the revolving quarter, facility close dollar $XXX were This term Following pleased provides with our the voluntary result to of and close million repayment a we upsized amended loan. and U.S. flexibility financial us have increased on facility. credit on extended million made as $XX

to allowing audience their value their a saving their continues reducing them focus elevate As resources providing Images company, by connections, to on creations and risk. Getty to precious our and meaningful customers and time

on content partners, based through our supported and contributors, content focused event rights, access offerings, by our differentiation our the our We’re of exclusive expanding archive. depth our the quality expertise of premium on and our and

capabilities embracing new to recurring new are our increase value and the We to customers and we to provide streams. revenue create

expansion. geographic mindful near-term quality while products We across growing We by our momentum to management, continued cost and invest discipline retain growing growing commitment subscriptions, downloads penetration continuing long-term are customer conditions and through video customer staying customers. and growing our partners geographic ability and via technology, new of current see base, economic in consumption, annual high highlighted and to customer attract

And will with over that, I’ll who to detailed hand call take you the the financials. through more Jen

Jen Leyden

everyone. Hi,

currency our spite to the all results neutral in and start broader drove financial quarter across a macroeconomic first operational geography. environment. the We continued reflect of of growth in year Our uncertainty solid

We healthy expanded to solid XXXX. generations, very continued across and our strong flow a and results our our cash subscription bottom overall line start so delivered trajectory we and business KPIs

reviewing performance. our here. of press March are XX, months ended I’ll XX XXXX by LTM KPI information seven LTM I’ll or few comparisons contains key the begin metrics period all the on for trailing on but touch as our period financial March today’s the All KPIs, operating XX, just of a metrics underpin release of to XXXX. some with ended KPIs Note, that

was total highlight meaningfully reminder, by impacted the impact a our I’ll we of made reporting. QX to which two changes data with on beginning As changes. these those our results, subscribers, annual changes more XXXX go-forward customer active

customers level the moderate healthy On of to the of period, we XXX,XXX, macroeconomic slight basis, purchasing in given focused environment. from annual purchasing growth rose Total an still Partially offset carte our base, month see per customers purchasing of a over a did business. a the yet from growth XX X.X% revenue sequential XXX,XXX in increase comparable sequential to more e-commerce by la which a in total in subscriber part our $X,XXX pullback a pickup customer $X,XXX. drove current

in annual increase access. robust changes adding active in I This growth largest a mentioned of XX%. been Absent offerings the XXX,XXX. is impressive reach XX% subscription our period e-commerce have is delivered an still by approximately growth well our counts, XX,XXX to corresponding This subscriber premium over XXXX. reporting the the would fueled as earlier, subscription increase We as

revenue up of made Annual quarter. total over for second revenue consecutive the subscription XX%

awareness For to those benefited compared customers period XX, XXX.X% We March million, annual ended a by strong our volume on XX video with value our in over X.X% improved from this both paid investments measures will in video which XX% rate, compare. our XX.X% QX in video video through high across the we growth believe driven which to subscription content years. we approximately creative. drive the And XX.X% download LTM search grew subscription offering to to the editorial XXXX, improve from last, and year-on-year our COVID metric period We video products, coming revenue at in customer’s and expansion engagement rose of retained a higher differentiated downloads a making impacted XXXX. are attachment and by

our performance. Turning now financial to

a foreign headwinds to quarter our guidance, results currency relatively year-on-year XXXX. impacted this we our headwinds today, the we euro in foreign difference half move to meaningful ease reported rates the the in to neutral turning respect the pound, a in our see reflected were As them driving and slight exchange performance expect currency the by we As between we back primarily with expected, assuming rates, these our of through year steady tailwind hold to where as and

corporate in basis Total up neutral our on saw million, performance reported on our revenue currency quarter. basis points demand in revenue year-on-year growth year-on-year our contributed of approximately which timing Included across expansion are recognition, certain a subscription up strong these business, impacts a first editorial driven of customers revenue all X.X% We to geographies our basis. business. XXX was results growth further from the and and by the continued $XXX.X in a X% of

mix our of full to subscription premium total increase growth led in iStock, was quarter This up XX.X% XX.X% from revenue by in of of year QX our in the that to grew and quality, our of momentum further to across for we and the annual video premium music image, customers subscription. unmatched access revenue our The points right which for remains Our capture QX, access and offering XX% this XXXX. plus XXXX opportunity and can business, depth, breadth, unique subscription our library. an the solutions provide that by with video content expansion

million and currency was and basis. $XXX.X and neutral Creative iStock Access led down X.X% year-on-year neutral on a on a growing year-on-year Within a our basis our XX.X% positive were subscription annual revenue driver products creative, by currency Premium subscription. up X.X% by X.X%

streams. from business, our a customers, products Within overall customer free stable provides customers conversion with the monthly paying e-commerce which our into annual we carte with in la or us of revenue our iStock and saw offering, trial more subscriptions with long-term means shifting to strongest

level ad we still are to our off Europe business of to build in challenges the ongoing still days addition, and a this very in market although given performance. where a impacted In relatively see of macro Where our softer our product Unsplash+ base continued in early small is we and continue subscription launch. agency pressures momentum,

growth and up strong Winter in news basis. basis for another $XX.X Editorial verticals a digits on reported offset also during challenging led double-digit million compare year. on currency was entertainment. currency revenue year-on-year single The archive with strong the excellent a This XX.X% by neutral business, Olympics and last both Beijing neutral year-on-year, in than in basis XXXX were editorial double X.X% our reported was performance more a on sport contributors digits in and currency This and of high QX, QX neutral.

basis major of a in neutral and currency all of Americas, APAC. remained X.X% the across revenue grew less revenue to Revenue cost in strong QX consistent in revenue XX.X% a Our growth in X.X% on X.X% as compared and year-on-year at percentage XX.X% of with XXXX. EMEA, our geographies

$X.X expenses stock costs, and up revenue million our vesting was cost and initial million of quarter which partially from public The higher the year-on-year SG&A reflects by savings higher Total $XXX.X included of a offset of legal year. employee expense largely up company incremental expense XX.X% XX.X% year-on-year occupancy. compensation, at last the in staff being

X% up X.X%. was basis, EBITDA million year-on-year. a On the adjusted was EBITDA neutral $X.X or million down Adjusted $XX.X quarter for currency

rate driven margin with compared the FX the Our adjusted those QX very impact XX.X% margin of EBITDA by expense. XXXX SG&A was XX.X% in strong higher lower still and to

capitalized million The the partially CapEx was spend $XXX,XXX a QX, percentage was subscription. X.X% of in costs the equipment prior CapEx of our X% decrease $XX.X of reflects Unsplash+ down content year. lower decrease fuel flavor revenue purchases to year-over-year. as in by acquisitions from and offset timing a

million QX less of Adjusted a X.X% compared slight year, of increase an CapEx last million neutral basis. EBITDA $XX.X and on representing was of $XX.X in X.X% to decrease currency a

CapEx cash from was Lower flow less QX EBITDA and to large $XX.X inclusive free of in related $XX.X XX.X% million part was adjusted $X.X expense flow those in of Our year Free QX payments. increase reflects $XX million timing down XXXX. adjustments over of of XX.X% prior the in interest timing compared of primarily cash margin million to the capital million an due QX, working XXXX. cash

$X.X quarter QX loan, a we next, six for terms, impacting the the shift payment example, quarter Cash for taxes cash to payment from is or three were can term when in different our $X.X decrease a one of from slight due can months, the which XXXX. quarter one from elect million to next. Under flow one, million

year downs That balance Our March USD a our in with from $X.X balance QX million, quarter from five first March cash XXXX the XXXX. XX, of up XXXX repayment in of meaningfully $XX.X $XXX.X loan XX on of our year. of was end the times of from on million ended the ending decrease balance decrease reflects net year-over-year of pay unchanged cash in this million and XXXX. debt term million of of a and leverage ending as We X.X end inclusive total our of down from quarter a times $XXX.X million $XX

March converted had we as $X.XXX X.X%, X.XX% $XXX.X interest using including XXst, total rate billion, loan of applicable million XX, loan rates interest XXXX As exchange with outstanding X.XX%. million USD of of million notes, March $XXX.X senior an term debt term rate of $XXX euro an applicable of of with

upsized borrowing we expanded last maturity XXXX. to our capacity to from As extended XXXX $XXX revolver, May Craig ability access from million This to our improves and million week, our to February, to undrawn, which our successfully and the operate $XX increasing just of continues extending liquidity amended remain earlier, new facility, and nimble. noted

size Our long the our execution underlying partners delivering ability ahead. to the of company’s history opportunities double support the in of confidence of banking in and in lie strong performance our the model demonstrates our nearly revolver our and and that financial business

debt account the our our repayment sheet rates our cash March In A rates we our undrawn demonstrates fee commitment to agreements, the and our revolver exchange generation. with our is a interest balance week addition, interest of USD this amended sheet repay cash successful $XX balance of repayment portion expense deleverage swap earlier cash XXXX million debt strong in May Based and approximately rates on to taking to applicable on balance $XXX the $XXX of as XX flow loan. on foreign used million expected million term $XX million. further into are and the interest be

in subject Of filing. changes which SEC environment, course, the outline in rate our interest to expense interest details our remains within we actual more

strong In cash generating is a free summary, this business. flow

increased taken steps structure to flexibility create both and have an operational standpoint. We from capital

ahead and driving execution We remain have on meaningful focused and on shareholder will opportunities value. growth we long-term and disciplined

our guidance Now turning to XXXX. for

X% $XXX growth year-on-year X% currency X.X%. of million of representing to of revenue $XXX growth neutral to expect to to and X.X% continue We million

XXXX. $X on second and rates estimated implying the million quarter, of QX $X.X the headwind nets current about an from FX in top-line a This of million second year. negative the of for hold, the Assuming headwind we about $X.X half benefit approximately FX estimate $X an impact full the of includes million million in

FX saw fourth quarter. impact to we would in shift XXXX, the Given of a of tailwind FX expect primarily the impact bulk the the that in XXXX, the adverse the we of half benefiting of second half second to

$X approximate assuming from in We including X.X% X% as X.X% million $XXX and XXXX, up XXXX, tailwind quarter. largely the expect $X in up of adjusted in QX currency-neutral, a million expectation included of in an million second adjusted $X fourth EBITDA EBITDA the $XXX $X.X of up to X.X% million the impact and quarter, the million FX year-over-year, a about in to to headwind of impact second approximately again, the million half in adverse

pressures Please note, a to opportunities proactive built well ongoing to and our financial ongoing the strong cost cost that to execution our against into cost growth performance this operational to continue guidance as to agility. tied and are company. and company the believe anticipated as management deliver impacts operating litigation We position approach of as macroeconomic related will incremental public

optimization. We highest our balance is will on what continue and emphasis to use with continued deploying our its remain sheet we believe nimble, and disciplined capital to best

call the questions. open operator, please that for With

Operator

is you. question Please Citi. go Ron of ahead. Josey Thank [Operator first Instructions] from Our

Ron Josey

Craig taking wanted and the two, question Jen. ask please. I Thanks to Great. for

be so then the the And you The first, partnership it’s concerns, growth go talking Craig, and better subscriber to the XXX,XXX been foundation help visual subscribers. the that going live here, for content, is using, for expect on just this the past it with first licensed, to on question we’ve the one about the and do just when sort to and partnership. us models AI understand Jen, of the in accelerating customize partnership how addresses NVIDIA next

about talk the drivers Just here.

was Thank mix mentioned, you. be any would corporate subscriber but insights I iStock between think helpful. the on agency

Craig Peters

holistically. I’ll address I it’s the live going it And I as the and as generally certainly question thanks across this address of kind media for no been has just to if but well topic because for timing, actually useful a is going call. it’s go thought NVIDIA just the question. I be to okay, I’m Great, it AI suspect might

think, move start years, core it media. the and XX by to I Getty has Images driven been it around imagery driven a and by the So It’s driven then for has smartphone digital with then cameras, the I kind ultimately first exponentially. was move available of of the universe a proliferation online, XX throughout social by then of those business want grown and was years,

editorial, basically infinite. solution competing a being of universe with it’s imagery universe And the being focused the coverage quality we’re almost is approximately infinite And reliable, on and that that’s within And a company a our a of events on ubiquity our an resulted really imagery. despite we’ve customers of comprehensive in exclusive third that. our rights, source high always AI that’s we is entertainment in We delivering business, now content never generative of unmatched trusted, as value source and a focused across provide Images archive. of to imagery. Within and Instead, a the sport timely, of tangible partners nor additive level unique Getty and provides of there. access news, that’s value

customers solutions our required Within that imagery and base high our that deep what meaningfully customers to creative, every provide experienced exclusive through combine community. on that and pre-shot is every and quality, culture, be conceptual a geography, an audiences level and that do that every across authentic, with distinct. across contemporary, contributor what a selection engage produces required, we allows will their with of of imagery We is research end

customer. and the are the budget solutions Our risk reduce efficient substantially incredibly time of and

services, resolve to imagery, to concerns, elements expect issues can of AI We legal I of types address. see that. content to the value with but do time. But core the we our generative And a replacement as a We adds for quality our of threat consume we over see some resolution models we those some Images. which with generative see the don’t customers provide proposition. from universe form, Getty in So real nor even in the those, current

can world proliferation see provide expanded where value generative a in face the services content. In I actually our of a fact, of our content and

contained dimensions. AI, opportunity that, to look opportunity starting off core offering efficient customers understanding pre-shot object traditional Images of in transform pair the budget that I near generative to kind in our of when launching see our we that really significant one view prepared five there’s there, meet I’m the and that background provide start at we through value time at when allow of We of the we then business. and we our in and projects and the it kind to introduced also term. going that’s to with Getty imagery specific how pre-shot of think lens needs see services and building for look across with discussed base the AI, we’ve already touch remarks, my the our easily with and them in removal the removal we

about on take seeing. That’s of through up of can BRIA. relationship. that the some independent our go that partnership And It’s based with a we’re NVIDIA where again we’re excited

element AI generative and the hand-in-hand risks opportunity the of, our exist with is NVIDIA, and around current legal out of offerings. pre-shot that’s that in models partnership models with customers The that to our second address see in we generative there that introducing much working

have risks? to property where of that are intellectual real brings lot those are of don’t questions Well, trained that of off into a these, models rights models, these in fact, they are most unsettled. these What play

are go cetera. rights to the stability clarity whether There against risks try also to challenge the et have get they’re that. beyond and intellectual within images, of legal that’s into though, AI individuals on one to those risks a think of portrayed but privacy are brought property I that you primary that, and have that We

elements trying partnership table, So those And with to to bring the in second we’re half solution those year. really that a the the services NVIDIA. that over this we of expect to addresses launch

that’s partnership NVIDIA. with in So the second piece

their, think to, we also to and technology their cloud, degree as of where And to to through be a be services offering. And our distributor you customers. some that distributing cloud generative it expect expect can one those we to services NVIDIA about those

or our leveraging offering. of to is is quality compliant to see concepts we as different really a tool for efficiently our creative in pre-shot than, content our bring AI the to a and that This no ways way. software advent depict contributors create element generative third artists visual new that high allowed concepts and The new interesting to new experts visual concepts

we’re new so actually content it generative we and stream exclusive can be excited can licensing area offering. train about think models. our recurring And our pre-shot that maintain metadata add to data fourth based that of quality and utilized off The ongoing a and flow to creating high is

partnerships And NVIDIA are having so those to obviously are to the expect gate. conversations and one of that those have continue we is of and out

other concerns privacy, through work like which bias in And and can a how today to us was the And on also then announcements of be AI intellectual that is then we property we’re engaged that’s of and EU, then long highly generated across work things, by generative those things some EU, progressing models. encouraging. think we the time in side laws efficiency lastly, cost the where to actually solutions and front, functions. think processes and established some legislative see there came can the could improve over variety misinformation, personal beyond respect help AI framers our that And I specifics, advanced address

trade on that the do to of the winded how bear timing is it about AI So and we in then I come addressed totality how then we’re pick at we’re to of to NVIDIA drive on its hopefully, live. answer, making you we kind will more seeing growth but and outs when specifically the think a iStock Jen, up and go want ARPU? sub some

Jen Leyden

the the be but growth in Thank going so answer as space. tremendous answer to our count. answer annual corporate sitting questions, is Craig’s my will as To can’t be yes, Ron. was now, I you interesting can. promise subscriber your our I of question, for majority in just that

iStock subscriptions lot subscription over a as good by that trial just launched is ago year a success going free growth we’ve really So from of well program, to our we’ve be good a we seen and driven had, results as that conversion.

of our tap well. as That’s our part markets, some subsequent conversion the of really some and growth growth strategy free into that so driving of that trial to

as a sitting don’t consume largely part I basis. on think, Ron, for subscription that the in So most corporate agencies space the

our our helping seeing and piece corporate we’re our growth of business nearly certainly of the approaching So XX% revenue of that. is subscriber some

Unidentified Analyst

Great, thank both. you

Craig Peters

You’re welcome.

Operator

Thank Zgutowicz you. next go Benchmark Company. Mark The question from is of Please ahead.

Mark Zgutowicz

that evening. Good you few follow impact you. to you up the of on community, actual for gen if just sort working but be sort to just know photocopy a economics, last to of yourselves Craig, near-term community. will. a you AI in the manage the and AI of years dilutive think out, if I would the sort mark, Thank your longer imaging a also maybe the And sort generative I big of and guess about one over terms see thoughts next then see creative or helpful. the Getty of, guess creators, is term, those I economics initial you of how how if creator the both – generative you question to net and to both there

Craig Peters

from mean, easier business. things into going to NVIDIA a to. some faster our on the think certain standalone Yes, that I our I that’s with content customers and service quality allows do additive we I welcome. in benefit to solution think and metadata, in think, we we I’m of we’re way cases. to is is to can I look, a happy working It bring have the think that that that market a building

a they’re we Another think value assurances are models basis. But pricing obviously, case And we’ll are kind around model not model is value some that, of nascent. customer base. of developing the but that incremental can the some of we given probably go can quality and our there that offering along that and the on with standalone be get pretty that given

don’t So over it launch be revenue half to I to a can I contributor time. start material as we come expect But in Ultimately, second revenue over economics recurring those to be to the stream expect again, it XXXX. think meaningful within these. I a see

we’re profile the the economics that In are would with terms look very compensation consistent revenue expect level pre-shot And together very be the metadata our the current the I because a revenue images putting broader that to to we that’s of these margin do of profile. that’s And trained creators, stream that going that contributors going margin our to it’s at to base. a our for consistent pools were on. created and to content

what as is, et and essence, types terms what our Over to the content to long-winded much of customers gave we’ve I competed leading that of cetera. know content, in we response, always in in of needs what content. trends, it kind mentioned and cases the know the free imagery long-term infinite and contemporary Ron, against I recency know be of from even cultural infinite are in visual of the imagery. trends we kind and where many the our We And the consume how us, are

that’s don’t We content a generative content don’t an fundamental Getty that at within And of the we’ve AI not Images. threat why types but maybe that’s offer is that don’t the And that not, asset does, it’s And everyone creative so same we that that just a look differently. things really think our got an brings asset. not offer. team. We I value, we An to unique offer we is do as service asset, else space.

contributors, a model. working research, we’ve deep doing built with exclusive different We’re we’re

bring, model potential lacks it that that come can it productivity that. what’s been to always AI one that and has is for power and And about all its of

the the of and considered really what we in always you it’s archive of kind take And be a is fashion happening It’s a the which I’ve creative do to editorial path in, it’s back the almost side, our we’ll landscape. fast so continue how and view business. to now in real that business into we’re what’s of on – kind

the create in to value that add ideas And to we customers. do we do the and things that’s contemporary? are concepts life new How bring How really that we ways?

and this expect we in our corporate. to metrics crystal we we’re a I expect business that don’t conversations we have having in not in any don’t think way, in shape of look I nor I the customer these. media but any don’t see hearing all So customers agency, at or or it seeing it And ball, obviously the form, are with across that we’re

in as challenges probably out of things content risks our on that the them of kind there. AI services many increases they of fact, of generative of hearing and and pre-shot the cases to In some we’re the bear value the side with

Mark Zgutowicz

bit just and Thanks. Craig. curious could terms in And maybe your so on weakness, question side Is just That’s you answer of the heading? weakness. à then Unsplash retention level your mentioned getting, the ask same perspective, that Jen, you’re carte retention I guess to big super just that guidance, what’s Is general do in Jen, that some direction you. helpful guidance? but if of there? I percentage one, that’s a Thank And context yet. terms could you’re worse, you showing sort a in anticipated in la the what’s benefit agency that that there the terms is a now, coming from of I’m what of, of deteriorate contemplating I anticipate there, obviously COVID adds a net you’re to levels fair? that came that Thanks. last then if prepared just side, from maybe one off as

Jen Leyden

Sure.

seeing. that we base disclosing Unsplash early We as really But that. like primarily mentioned prepared Unsplash the customer we’re because product. in remarks, like seeing the question, it’s with yet, not just on engage days we on the So the what

subscriptions seeing day. added a new of We’re every healthy volume

a We’re there. versus of count this monthly, at so to seeing point. favorable piece things good material our Not subscriber mix all a strong annuals

yes, broader question, so On revenue the absolutely you’re right. retention

for in revenue reference XX%. I memory, our dipped to XXXX down For that think retention XX%,

a for entirely was company that due So low point certainly COVID. this to all

So compare as we positive in you did XXXX. that get referenced

that we around look out the fantastic. COVID me, history you hovering period, us around So and our just XXX%. back XXX% at one tend to if you To strip sounds impacted average

somewhere that So level. we to stick expect that see would certainly around

of things. level the really think that factor In we for guidance, to agency of pressure. with terms on to out this macroeconomic Again, try guidance of business side set see to I some tend we in our

So know, think that on to well agency this could revenue our again, know extent business, we we we under be of at the we factored XX% have what point. impact what our

to expect guidance did we decline. seeing still out agency business the factor ended to a in side but slight QX, how we happen our we that how whatever improvement the being So year, exited into relative in of of we there, coming performance

Craig Peters

other I Mark, retention I the side add And no problem. just of and subs the – on some just Yes. revenue would things of part. would and the

context. useful it’s think I

I the think it level a more customers we’re we on this aggressively of what kind customers on annual for are remarks. initial we that iStock means in of on kind of that impact customers trading our doing in pushing terms platform. And annual subscriptions Jen bit has to purchasing iStock. LTV off slight hit fewer ARPU a get But higher are purchasing is at in order from and one

those small for cohorts do the and cohorts these have the within – subscriptions offerings, businesses, do they are a typically a overall XX that those in, downloads XX customers product retention revenue those those lower like customers to in add month, downloads month company. are we When

Now, the off a and to highly trade ARPU LTV at kind again, business. advantageous of it’s

higher to relative at would see to customer we Images say a Getty I So we over as are very revenue that see driving pushing getting churn in to and all. are I where in push we base, outcomes see we push good the slightly time weakened the that, numbers customer and we we think churn you to little retention can just continue kind that as new has that are no what that, enterprise to going of base that it into historically customer

Jen Leyden

a there, other historically Craig track thing does migrating customers good I’d this company that have is, to The note subscription value chain. of up record

So as for on coming are notes that build same some creates as over that the subscriptions, Craig us smaller to revenue these base. for opportunities time customers, of in subscriber

Craig Peters

Exactly.

Unidentified Analyst

color. Thanks helpful. Got additional for the it. It’s

Operator

from Tim Please Nollen is Thank ahead. Macquarie. you of next go very The question much.

Tim Nollen

thanks you Hi, hear Hope okay. the for taking can me question.

couple annual more not or the your the growth related. very related sorry tied active purchasing release? AI in way was or And is I quarter-over-quarter flattish. is growth some quick could in that if the that I were I you in there. noise. your that’s called some seasonality your to got else down modeling I’ve any But volume subscribers wonder And if there’s pay wonder secondly, think if just as out a background you customers the events to memory, kind that editorial just in download specific strong. questions, was refresh of if there’s anything Thanks.

Craig Peters

Jen, anything. and appreciate I’ll take Yes. feel to No, it. then add this free I

On the it’s major not by any front, events. editorial driven

year there this year-over-year a on Winter year was there fact, wasn’t. Olympics In a last compare and

to a performance. we’re really what media some revenue services seeing outcome to value their We our about think I seen and just editorial customers. the It’s a published we’re that. customers off time And based also I performance good really our it within the in that seeing terms to they’ve recognize business. speaks think that feel what of are of one delivering the that we’re environment. editorial challenged just in value we growth that kind of So strong delivering we’ve that have our in And and in where from

advertising seeing is how of and product with declines their spend us business. having an volumes they’re them our that think through important I consumption efficient overall, speaking and in and to We’re they’re

unique driven It’s strong space. that by I there believe of driven puts that fundamentals So no, it’s Getty not the that – Images events. is within the out really by product

the higher things, of And annual to just on the we get highlight comments again, the quantum customer somewhat that was product. are to the iStock part side that’s the Mark customer would of purchasing commitment On in some trading lower mentioning off in business. within most the of I notable order purchasing I

in Those some at get levels levels we value much So of higher lifetime off LTV, subscriptions. of a year trade order the much the subscriptions of of business. come to level to higher at and within purchasing higher spend level

that So we are consciously making. that’s trade-off a

continue ago, continue to that we the make that But and at around as all we we it’s very trade-off. business over positive we’re been that learn that’s that of one the kind into the to last Obviously details and that aggressively, looking and it we it see monitor more and XX been to – we get confidence deploying ramping we more a the see up. we’ve about And months and that really through you’re up come numbers. data, we this started little to more ramp test and it bit starting as

Jen Leyden

chime I editorial. if in there just And on could Yes.

So the you some events. events of QX mentioned remarks we actually mentioned in – those are prepped

saw quarter QX. no entertainment. strongest reported terms revenue in events this noted in Craig as our since anchored of growth seeing So really we’re entertainment in We But XXXX. major for

So strongest have if recovery following lag the one we terms being in mean, of I been you’ve you’ve of bit us a full for an company the, heard the eight-year again, entertainment in is this period. entertainment quarters COVID, the talk since about seen post-COVID.

So big that Add archives double-digit entertainment is in news, as growth way. back in to a in very very, well.

really, So exclamation an that performance editorial on me, solid result, result. across But point excuse really that on editorial. entertainment

Tim Nollen

Thanks very much.

Operator

The you. ahead. from Please of go Sachs. Thank is next Feldman Goldman question Brett

Brett Feldman

question follow up, thanks then for Yes, taking and that. modeling up to follow question. A the

see. than some of the would’ve full It expected. year better guidance was like were areas ranges certainly there the certainly You we that good reiterated performed business that to looks

one traction seem is to full the You made way, areas modifications your generally composition wondering them, something you’re to if you’ve curious we if great editorial. you Obviously of as you real and I’m it outlook. tailwinds, which would that be I towards were strive subscriptions. that to down but showing like just incorporating guidance with year, referring your with should into was that’s of there’s break I the revenue our certain don’t any for don’t, just it

uncertain other to be environment Is good to an Maybe have bit? we or cautious should maybe is, be valuations a see you’re boost in more see question to where as bit And that that signal? then you’re down just a Thanks. it’s looking to inquisitive the continuing come liquidity. a in environment an

Craig Peters

Jen, you second take I can on the want to take M&A? the first, and

Jen Leyden

Yes, reminder the of the mix editorial year, XXXX, and of that in revenue balance side in change so of to a editorial the no are of maintaining coming guidance, XXXX that bulk in year revenue off even the in year in a the the of come. business, business with we for on event

So, but you’re areas, anything guidance that call right out terms in modeling. different for of not stronger to some out would performance call some in we of composition materially

Craig Peters

we’ve pay will us. two to And kind in to ground valuations challenged one on be, continues doesn’t getting Yes, times. think have debt. environment priority economic and present side eyes with bit now ultimately then It a I themselves for times we closer number there or environment. a three adjust a of focus that are little down present around capital to pay we stated the to open opportunities our to the of that as will themselves kind to balance respect again, mean before on But the focused and But ignore near to kind and opportunities our half things more we’ll I in front, that we’re is leverage sheet the of might of the debt right M&A. down think that that be and

Brett Feldman

Thank it. you. Got

Operator

much. very you Thank

from of ahead. Cory go next JPMorgan. is question Carpenter Our Please

Cory Carpenter

you’re about questions. and to think new up are the ramping data like on your for AI that you then can in to extent fourth just margins that Craig, how latest remarks point hear the the stream, of cases? part also the of the able business? licensing thanks opening and the recurring to some love the just on of to front Hey, you made would in do sort on around look what legal Thanks. steps the And timeline those next what

Craig Peters

anything can’t the I on front legal call. speak to on Okay. this obviously Yes,

need think the for tell you I I the compensate can think, is So ultimately their material increasing. that conversation but to I IP owners around

in the we’re and around think seeing some by models open those. – generated the leadership key being here the of that I the recognition are terms in players of that

seeing commentary. I think legislative kind the that we’re in of and regulatory some of

and we And think of it launching heading conversations understand we’re to model rights degree. around prominence that important models clear with I have or the was and to based it, that they so that And towards going had obviously, them NVIDIA it. IP, that to the of that be off are we’re that, we

So, that’s going to importance. increase I think

resolution I that reinforce position to but think our I reaffirm expect play that that position. ultimately the we that’s one legal going pursuit quarters, out coming that time. and over of think will is in don’t

to think I believe it’s term, marketplace short is ultimately update material AI that these AI don’t quality new but significant monetized. I is do in model AI to going got going business. getting the now content one continually in we content point right revenue to to a is be large expect of this I and streams being believe the our not that it’s to So, largely that a monetized and starts these, bringing high I models for the But these to where be at and opportunity get

streams will be But intellectual Images will revenue time Getty property I cut I longstanding the strength of streams like there will believe and significant of its off based its get over those and it be, law. said, assets ultimately revenue and fair

create the way our again, content is a and how with current that like this will the based consistent reward mentioned, them in I put We profile, directly. content be contributors certainly approach So, and their I when intend partners that, we to the we place. license the with consistent that off think reward we expect margin in very business, to that

Cory Carpenter

Okay. Thank you.

with And Thank today’s time. this you have no Ladies will very at that, conclude much. conference. and we gentlemen, we further questions

thank You at you for And your your time. this lines may disconnect participation.

Getty Images (GETY) 11 May 232023 Q1 Earnings call transcript