GETY - Earnings call transcript Q1 2024 | Getty Images Holdings, Inc.

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Operator

Good afternoon, and welcome to Getty Images First 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 would like to turn the conference over to Steven Kanner, VP of Investor Relations and Treasury at Getty Images.

Steven Kanner

Good afternoon, and welcome to the Getty Images First Quarter 2024 Earnings Call.

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

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

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

Craig Peters

before you Getty the will first on progress financial touch quarter at high Â Thanks, and Steven, you for Jen through earnings quarter our and thank takes I call. first everyone level Image's full results. to performance joining a

before of our macroeconomic outlined quarter agency tougher business. being the impacts with financial was year-on-year a first our only balance Hollywood of growth soft compare Within strikes strike in due performance pressured of challenges impacted the to call, the quarter the we year-over-year the editorial, faced the editorial the from year. As also QX residual and in we last XXXX expected,

million, combination video representing the in $XX.X represents currency-neutral images X.X% established reported Getty races For Motorsport of Images basis. on iconic position and Motorsport such representing revenue. photographic Racing, images. also quarter, April truly Images offerings. a as such on X, just first teams reported and On FormulaE, Formula In came McLaren EBITDA deep quarter, of of currency-neutral that the for series X.X% decrease the year-on-year X.X% Motorsport existing and Getty revenue archive of relationships across down imagery million as a $XXX.X automotive funded or XX.X% acquisition with was we and a the closed brings over XXXX Adjusted racing official images as sponsors. and augments One. partner of

of front, excited the the Football Continuing content time. Motorsports the were number are this renewals for on Association. offer pleased can week, growing we this for addition sixth consecutive Metgalla exclusively Bloomberg its covered to and English we the Earlier announce We what stakeholders. with

Motorsport The pack, content new media. commitment our added Visual testament our to and the Pro acquisition niche League, We to partnerships also customers. Saudi partners visual and content best a Capitalist the deliver Film spec as very these stand with to sports continued

do for we the photographer Paris, Paris, doing the International where XXXX the are the Add we of Committee. have are our way forward, and is supplier and Olympic UEFA. agency again they photographic before election its lit the global Torch Looking on are now to best. official we official UEFA the Olympic once what teams tournament, where upcoming Euro busy in cycle But

to having AI to in NVIDIA libraries. customers.On enterprise in capabilities. as coverage rolling launching historically such awards we fine-tune entertainment excited Southern generative hearing early out meet House the in with to brand expand shop capabilities the company's University from commercially ceremonies painting surface categories business. allows as still contemporary honored signs painting, offer created early At of benefiting digitization as new started team peers the in and rarely University exact we continues ceremony HBCUs in We This our as across their year, how this offerings to University over photography was Lincoln the funding free NVIDIA, days, services with Delaware team NVIDIA's spend feedback A&M our additive adds towards a range style. excellence creative generative Awards It library, needs custom, breadth doing model Foundation was we but were program March, the sport and GTC that and as to across libraries. in will tool such upcoming AI archival and our award we're of of and this Starting News preserve seeing to embedded with College the topic our capabilities quality, This adding announced depth, is powerful is and a to politics colleges partners business awards. Stock, Best recognized On in it while seeing fine-tuning black the British we AR X seen during XX Pennsylvania and and industry photographic to State is Association custom combination provides a program NPPA's in awards, of i the plans AI positive expert visual half the positive out Pidigraphers purchasing month, our partnership to those in previous quickly Louisiana, engagement, the and of not about journalism our categories, including quarter. conference and safe add HBC's June that the creativity imagery to of customers secure that and well SGA universities, best, Journalism the Photo news, White and and front, Sports sport news, by continue our our

a will output, a fine-tuning, image provide As in finer also release APIs generative that of over biggest control of the AI. part of challenges custom one collection we

advertisers by We're tools Our detailed Dentsu, API take Jen now already financials. turn to and to more excited And you regenerative the at McCann and over of for are being the WPP. through balance creatives call year. I'll the the leading used

Jennifer Leyden

slow results earnings start the broadly described reflects we QX QX Â Our that year the call. our to anticipated and on

the of We our the pressures our be business the effects broader ongoing known of year's some agency expected from strike, environment. challenges in most acute in to and continued residual quarter Hollywood headwinds macroeconomic with last first

last with our only by was had a also as comp remainder of We year QX quarter of business XXXX impacted the in strike. editorial the in growth QX, for the adversely being challenging editorial year-on-year of

by our said, to editorial still customers to or headwinds to primarily and down consumes entirely I'll All which comparison ongoing to into of XX-month KPIs, an subscription comparable nearly on we confident looking purchasing reported pressured This into which the period. some in that XXXX, growth as a basis. Total period la season in due LTM shift calendar transaction agency basis steadfastly of annual LTM our the of in our $XXX,XXX are be volume, ahead, a the the on more flipped ended our to of the business, start both $XXX,XXX, carte the to highlighting and year. robust tailwinds products with period second XXXX committed half can trailing turn a carte ended we decrease ability LTM XX, March remain March a from la lower attributed XX, customers the return in XXXX. were

our LTM purchasing revenue continues the saw positive Importantly, solutions per quarter comparable annual the the growth in XX%. impact active X,XXX on is tremendous well to annual largely LTM This in X.X% in to a growth excess continues subscribers, up of shift have period. be XX% consecutive our Flash again driven into subscriptions, $XXX,XXX subscriptions. customer, from the from We with e-commerce period. to sixth Stack more i in grew $XXX,XXX and performance a XXXX by growth annual by to committed This now which including our X,XXX of

new the markets of into customers be demand, reach growth supply our customers In LATAM, by annual the addition, of fueled power to in EMEA. subscribers content Out ever-increasing to and visual Images. half tap with were continue nearly new worth of and of markets to the those growth across customers continued over XXX,XXX brand-new our In XX% Getty a APAC new content. and world we

subscriptions averaging we speaking, our the subscriber and production Hollywood XX.X% lower download enterprise annual to related revenue rate onetime compared carte ever e-commerce was period revenue smaller in customers our media, in LTM a Our spend compelling over to some decline XXXX period. retention with business residual our remains corporate was across rates flat a some revenue Broadly broadcast as renewal strike relevant our healthy with our proof is due XX% prior and generally incremental reduction revenue was content certain la expected that well The decline customer $XX to from volume generally in the Paid than an north of XX% also demand. XXX%. subscriber as due and retention and in averaging customers. at to both million, of subscription rate of point project very believe primarily a subscribers an impacts

Our rate growth. another year-over-year XXXX, XX% QX video of in LTM attachment quarter to rose steady XX.X% from

X.X% a points. $XXX.X timing X.X% reported currency-neutral XX.X% customers, XX.X% independent driven XXXX. both basis revenues, we on la We solutions. Total continue basis. neutral currency has entirely our of also the on to saw results a the currency-neutral down growth carte strikes. of within across a growth revenue and X.X% the of is and business subscription digits pressured which Included down subscription down recognition, these by flat performance. approximately reported carte Annual revenue an largely smaller impacts lingering to a by X.X% more reported recorded accounted reduced video largely which or within on increased total, improvements on financial year-on-year Creative a growth business.Turning la $XXX.X XXX revenue across from was million, basis. both and X% the Creative to was drive customers. meaningful network full are and neutral, across the year-on-year. company up revenue of plenty our Hollywood larger agency currency e-commerce opportunity impacts our agency to and Agency, see stabilized holding QX a both subscription year declines was was to in double Creative total XX.X% revenue in million, from of which basis. up was XXXX for revenue by subscription Encouragingly, in Creative model In due was for Annual basis certain and

and making growth. double-digit this strong Our iStock reported annual currency-neutral momentum, subscriptions on quarter the XX% growing of both consecutive over maintained basis, a XXth

GettyImage's leverages subscription, Flash strong which with and to for first paid customized global our double-digit XX.X% to of quarter customer subscription contributors addition, network growth. cost-effective, content currency another neutral. grew or In exclusive the meet custom year-on-year And create specific delivered needs Unflashed XX.X% content,

a in agency, are a and XX.X% million as impact.Across quarter basis. sports. due The decrease strong was X% QX our of growth entertainment overall, verticals, XXXX balance believe revenue in growth down million, in X.X% across from absent news, compared XXXX business QX, our in X.X% of in in we of every of XX% only Revenue creative quarter XXXX, currency-neutral QX currency-neutral with archive less and with SG&A of at major percentage to of remained Americas, a some by APAC. $XXX.X editorial with strong against geographies which saw XXXX, XXXX X.X% business prior XXXX. our on e-commerce So for growth, of year-on-year was $XX.X on compares the year. a our for $XXX.X double-digit we QX revenue is revenue in our the from over year-on-year currency-neutral Total staying at strike XX.X% a the up is million consistently with in X.X% and Again, declined was impacts and QX Hollywood expense basis, EMEA the QX in a was cost of healthy, growing. of editorial challenging offset of results Editorial and decrease decline driven the

rate a As was was revenue, XX.X%, from up primarily driven our year. of lower expense higher expense revenue by last The quarter. in percentage rate XX.X% the

year-on-year driven by lower management decreased in million SG&A The quarter. reflects spend, cost savings. Excluding $XX.X our disciplined to compensation, the to decrease approach primarily of stock-based marketing X.X%

rate Adjusted quarter, excluding comp, revenue. a compared XX.X% decrease and prior percentage SG&A the EBITDA stock-based $XX.X of increased the year-over-year to period, X.X% revenues, the to was was As the down in a year basis. X.X% primarily XX.X% on million with due currency-neutral for in

of in $XX.X CApEX Free period QX XX.X%, payment including X% as payables, and X.X% compared which and was on down range paid revenue. million in XXXX the balance QX This compared our X.X% of million decline well million in from of first during debt prior within stated repayment quarter was and cash and to free taxes million end of was million year-over-year. X% sheet XXXX. up QX expense every September. $XXX.X capital our year EBITDA receivables QX $XX.X a is margin and in a $XX.X of Our quarter. EBITDA in to flow flow semiannual in voluntary adjusted cash working our XX.X% to We the includes by cash, the decline down of cash XXXX. of interest expected the QX, driven $X The million $X net $X.X XXXX. was flow to percentage the and with million senior of cash March of balance quarter million down $XX.X interest CapEx XXXX. our revenue of from Free in due from notes, our timing the ending of QX cash in million $X.X is in changes first related adjusted finished of million $X.X

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

remains that also have revolver million $XXX undrawn. a We

$XX to further leverage at balance X.Xx Our cash XXXX.In to of demonstrates to our the of we end the balance from repayment sheet loan. QX, voluntary ongoing USD deleverage our portion our used year-end This early unchanged cash May, a commitment million was our net sheet. repay flow utilize of term

debt Based for the into cash $XXX XX, as taking $XX to the to exchange to just is million in opportunity foreign the account we We on and expense XXXX May, rates our approximately our also balance market look debt. applicable of and interest March refinance million. rates conditions continue be optimal expected our on repayment debt and made interest

expense interest within which what our actual we challenging most filings. subject be detail year. environment, in quarter to in course, remains Of our fiscally the disciplined. we annual navigated SEC through we changes rate outlined of We financial In our the to have interest summary, more expect remain

to we We remainder continue to we be see to XXXX. for line navigate are through outlook laser year the focused our on top well growth as of positioned execution, return a full and the XXXX.Turning now to

continue to million, of X.X% growth We of million expect X.X% to is X%. revenue unchanged growth prior to X% This $XXX of year-on-year and from guidance. representing currency-neutral $XXX to

time updated prior also EBITDA expect note, year-over-year the our to market. X.X% X.X% down and this down have unchanged from continue also neutral. adjusted We $XXX currency at of This is current in FX guidance. impacts recent million, Please volatility given not we the estimated

$X.XX and euro assume to the the at GBP guidance continues Our at X.XX.

eye on FX call. next appropriate, that, update operator, the our rates. And close for a call keep please earnings we'll questions. provide will if an open We With on

Operator

first Josey with Our from Instructions]Â [Operator question Citi. Ron

Ronald Josey

you. I to with Craig, wanted start out

I challenges winding about think XQ, now this but guess. was in in talked down, there few macro as and Strikes is you things, and a those also Hollywood finished I are some

to a be you back about I in the certain Jen, normalise things of to up. forward? going sort Is Just to XQ us going half? can progress follow do maybe here? to think you wanted And that When talk then, the extent or

subscriber the You comments on had retention some interesting rate.

And carte, you to little those this like subs, if this e-commerce continued level more bit changes. smaller XX% maybe Or these better level? at about we a spending a off understand do talked you could think should can retention la you onetime lower think rate? unpack But declines.. I expect

Craig Peters

tension take Â side defer then So super things. first Jen to I'll and of on the

given reline expect year. and think second to that strike. I'd to be of we come macro, items bit where streaming slowness it the say of would in don't we a a probably guidance normal of at the the we say those things, timing of half then I of continue pre back QX into more say kind it we QX, after fully expect our in of year, this expectations maybe try of what and probably standpoint. the to a some schedules kind we side within So and terms levels we're from budgeting to necessarily expect, production tracking such what the little I strike. to I'd back to fully was see expected our as bit within throughout of But I and largely think up

Jennifer Leyden

on mid-XX% as customers of so to growth, reason there. that to I commented that back think, about is few tap question, unpack to Ron, the e-commerce the the trending I start the that of that is is, we to. we're to subscriber see kind things into. lot we'll start over where in a we're is that see back we're this which tick brand-new world do this in of your And markets into from smaller with, to that range. rate, starting answer really normalizing I'll coming of time, or the yes, talking really And phenomenal those retention we revenue on, just there's start for subscriptions. seeing end think a and with -- growth, as up that's there where

at lower comes, subscription rates. products, imagine, that lower customers, commitment, those do retention with can those point you price the with come revenue are newer So as lower start

expand needs, those every an for and time the Now with expand. upsell to as and grow of over as one their opportunity content us each provides budgets their customer

grow now, predominantly to to opportunity we're But over but low, a e-commerce seeing XX% is off that mix that that growth is customers. good chunk a time. of really what start those new smaller for customers they to in of nice that driver us So those mix

on this it of know, you subscription. there The other that counts as these their are subscribers not metric, I but revenue just outside thing commented spending to subscription revenue, the

carte a we're think impacts of that largely some a of a to to here strikes, residual we dynamics. is some contraction essentially the from in those bit la Hollywood budgets just spend what related that's subscription in due impact seeing And period. macro So of of of a contraction this some outside

subscription, expect which, spend as those commented, improve. a of improve to see that to little outside We'd well. just Craig So bit again, as we conditions see less start

Operator

[Operator Mark next the take our Instructions] we'll Company. question with from Zgutowicz Benchmark

Mark Zgutowicz

a follow-up Â Jen, about if maybe XQ. when talk that of that more then into And that is quick your time something just 'XX sort to just Or subscription XXX% are reverting in -- on back the expect we roughly at mid-XXs. the -- could you into and a Is baked of remained enterprise frame? should you the that guidance? up confirm

Jennifer Leyden

Yes.

I some XXXX, that we to as think see strike impact. that's these of come rate out unwind So start something expect bigger we exit an start more really and to to we'd as macro of

think the right on jump up we So really yes, back se, north exit per And enterprise as noted up of for as year. but enterprise, we that QX rates in see I renewal averaging still we'd to start don't subscribers we then picking see XXX%. to see expect revenue we that start the something

Mark Zgutowicz

quick maybe And couple of just a follow-ups. then

last was down video one moderated the in just they in this was I that separately re-accelerated year. and quarter. mid-single corporate if then then quarter whether curious I the on of agency attach And which flattish how I XQ? a Did corporate terms just at trended XQ. digits bit the that rate. exiting that and sort of agency, noticed stabilize Looking in in quarter, could, in was one, year-over-year

should thinking given you opportunity line we about next, a curious, so? be Just X upsell nice guys, for that trend years it, or over the that's how call

Jennifer Leyden

sure. Yes,

corporate QX in So happy corporate say on growth. remained good exited with I'm corporate that memory, in growth. Mark, XXXX to back QX we was

again. see to agency, for So declines trend low lines. those back down QX double-digit continuing was

XX% bit less or we that saw we saw. more exited declines receiving is what broadly We as So line improve what in decline were a QX, higher speaking, we year. but single-digit that in the

question Just other again remind what me your was.

Mark Zgutowicz

It's Yes, that... Curious rate. video sorry. on the attach

So should what are what over the thinking of time milestones be maybe up we drivers of about growing? of climbing that period that

Jennifer Leyden

Yes. Â Yes.

a every So that's we kind seen this we've pick quarter flattening one much bit. seen pretty have up quarter, where of out that

I'll us the a what When video So to right? come of there. see subscription we about are, talking our come our to video, upsell sure of merchandising about marketing, make video. really the know just have is those mean, imagery well, customers videomaker that customer all as upsell few I conversations. there's you an sort an video opportunity, know Beat's you of opportunity just you think that be When see option. we things all you that's sure things for do site, packaging, an customers make opportunities upselling, noted, with

for that us. to So continues be focus a

I about new that grow that think amount not equation those to for you the in in have in that growth, equation, is ecosystem. in this customers bit attach of of opportunity amount video big when some customers Broadly yet smaller of again, video speaking, needs. sitting back of plays yet, over as turned on new subs content math subscriptions. us the that's migrate is into time rate. both just bring correlate they we right? we a e-commerce that That to some as you those So are this think budget growth And those commented of there's a e-commerce big the have math a annual don't of and customers, where growth math Getty who here to that goes a into subscriber within

Craig Peters

-- video on site. have Â I on as today option to that unplaced subscription the the would add an just doesn't that,

attachment. Jen's So subs to we opportunity grow basically we for have current those point, as continue to as don't

video all launch downstream some subscription But going that we that is as on are initial certainly expect part this illustrations take-up those -- of opportunities. did at Although week well, point. and and can you

Operator

at for queue thank questions time. would the to We participation. like in this your everyone have no further I

all. disconnect any you This today's time. Thank may does program. You conclude at

Getty Images (GETY) 9 May 242024 Q1 Earnings call transcript