Earnings call transcript: Getty Images Q2 2025 reports mixed results

Getty Images Holdings Inc. (GETY) released its second-quarter 2025 earnings, revealing a mixed performance. The company reported earnings per share (EPS) of $0.05, missing the forecast of $0.06 by 16.67%. However, it slightly surpassed revenue expectations with $234.9 million against a forecast of $234.5 million. The stock responded positively in the aftermarket, rising 1.18% to $1.7. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, though investors should note the company’s volatile price movements and significant 38% decline over the past six months.

Key Takeaways

• EPS missed expectations by 16.67%, raising profitability concerns.
• Revenue slightly exceeded forecasts, indicating operational strength.
• Stock price increased by 1.18% in aftermarket trading.
• Subscription revenue and AI service expansion highlight strategic growth.
• Challenges persist in the agency business due to macroeconomic factors.

Company Performance

Getty Images demonstrated resilience with a 2.5% year-over-year revenue growth, despite missing EPS expectations. The company’s focus on subscription revenue, which now accounts for 53.5% of total revenue, shows a commitment to stable, recurring income streams. The expansion of AI capabilities and strategic partnerships, such as with Bloomberg, underscore its innovative approach in a competitive market.

Financial Highlights

• Revenue: $234.9 million, up 2.5% from the previous year.
• Earnings per share: $0.05, down from the forecasted $0.06.
• Adjusted EBITDA: $68 million, a decrease of 1.2% year-over-year.
• Subscription revenue: 53.5% of total, up from 52.9% last year.

Earnings vs. Forecast

Getty Images reported an EPS of $0.05, falling short of the forecast by 16.67%. However, revenue slightly exceeded expectations with a 0.17% surprise. This mixed result reflects both operational strengths and ongoing profitability challenges.

Market Reaction

Despite the EPS miss, Getty Images’ stock rose by 1.18% in aftermarket trading to $1.7. This suggests that investors may be focusing on the company’s strategic initiatives and revenue growth rather than short-term profitability concerns. The stock remains close to its 52-week low, indicating room for improvement.

Outlook & Guidance

The company projects full-year 2025 revenue between $931 million and $968 million, with adjusted EBITDA expected to range from $277 million to $297 million. Getty Images anticipates tougher year-on-year comparisons in the latter half of 2025, alongside ongoing merger discussions with Shutterstock. InvestingPro analysis indicates challenging times ahead, with analysts expecting a decline in net income this year. The company’s current ratio of 0.72 suggests potential liquidity concerns, as short-term obligations exceed liquid assets. For deeper insights into Getty Images’ financial health and future prospects, including exclusive analyst recommendations and Fair Value estimates, explore the comprehensive Pro Research Report available on InvestingPro.

Executive Commentary

"We continue to see growth in our annual subscription business," stated CEO Craig Peters, highlighting the importance of recurring revenue. CFO Jen Layden expressed satisfaction with the quarter’s financial performance, despite the EPS miss. Peters also addressed industry transparency concerns during the call.

Risks and Challenges

• Macroeconomic pressures affecting the agency business.
• Profitability concerns due to EPS miss and declining EBITDA.
• Competitive pressures in the media and technology sectors.
• Potential impacts from ongoing litigation, such as with Stability.ai.
• Dependency on strategic partnerships for future growth.

Q&A

Analysts probed the company on its agency business weakness and subscription growth drivers. Questions also focused on the company’s litigation strategy, particularly concerning Stability.ai, reflecting investor interest in legal and competitive dynamics.

Full transcript - Getty Images Holdings Inc (GETY) Q2 2025:

Stephen, Moderator/Investor Relations, Getty Images: Afternoon, and welcome to the Getty Images Second Quarter twenty twenty five Earnings Call. Joining me on today’s call are Craig Peters, Chief Executive Officer and Jen Layden, Chief Financial Officer. 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 Q2 twenty twenty five 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 Securities 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 statements 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 investorsgettyimages.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 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, Chief Executive Officer, Getty Images: 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 dive into the details of our performance. Second quarter revenue for 2025 was $234,900,000 representing reported growth of 2.51.8% on a currency neutral basis. Adjusted EBITDA was $68,000,000 for the quarter, down 1.2% reported and 2.2% on a currency neutral basis. We continue to see growth in our annual subscription business with gains across premium access and Unsplash plus and strong demand for video, news and sport content.

We saw an acceleration in corporate growth, as well as a return to growth in media, despite some continuing build back in production and entertainment. As expected, the agency business continues to be soft in light of ad industry challenges and macro pressures. It was another strong quarter for our sport coverage. Our Specialist Motorsport team delivered exclusive imagery of the Formula One seventy fifth anniversary season, including iconic races in Miami, Silverstone, and Monaco, as well as coverage of the F1 Academy and Formula E seasons. Our golf photographers were on the green at the PGA Championship, while our football photography teams were crisscrossing Europe for the UEFA Champions League and here in The US for the FIFA Club World Cup.

In entertainment, our team once again demonstrated why we’re their trusted partner for the world’s most prestigious events. As the exclusive photography partner, we delivered stunning imagery and seamless operation at Coachella Valley Music and Arts Festival, the Met Gala, BAFTA Television Awards, and the Tribeca Film Festival. This commitment to high quality and service is why the British Film Institute just named Getty Images as its official photography partner. It’s also why our designated Royal photographer, Chris Jackson, was selected to take portraits of The UK’s King and Queen to commemorate their twentieth wedding anniversary and the Queen’s birthday portrait. On the news front, we expanded our Bloomberg partnership to include Bloomberg video content in our offering.

While still behind peak activity in 2023, our production business continues to support producers with our premium archival footage and stills featured in a range of recent scripted and unscripted film and television productions, including The The First Steps, The Movie, The Billy Joel Documentary, and The Drive to Survive Series seven. These productions highlight the enduring value of our archive and the strength of our relationships across the production industry. Our insights platform, Visual GPS, continues to be a strategic differentiator by providing data backed guidance to customers across industries, helping them drive engagement by aligning their visual storytelling with evolving consumer expectations. Our latest insights launched this quarter help customers navigate evolving consumer sentiment around sustainability messaging in their visual narratives. In Q2, we upgraded our AI suite of services to generate even higher quality outputs with better prompt adherence.

Still based on a foundational model only trained from licensed creative content that respects the rights of IP holders and artists. And based on the utilization of the model for pre shot modifications representing over 70% of the usage, we launched bundles of these AI capabilities directly into our image subscriptions on iStock, so customers can access our pre shot creative library and our clean suite of AI services to use in concert with those images in one simple plan. In terms of the proposed merger with Shutterstock, within the quarter, Shutterstock shareholders approved the adoption of the merger agreement between Shutterstock and Getty Images. We continue to work with regulators in The U. S.

And The U. K. To obtain the necessary approvals and expect the transition to close by the 2025. We have no other active regulatory view of the transaction. I’m excited for the close of the transaction and for the second half of the year.

And with that, I’ll turn it over to Jen to take you through the more detailed financials.

Jen Layden, Chief Financial Officer, Getty Images: Q2 marked our fifth consecutive quarter of top line growth with continued expansion of our subscription business and healthy key performance metrics. We executed a solid quarter, navigating through ongoing macroeconomic uncertainty and continued headwinds in our agency business. While agency continues to be a challenge, we saw good performance from both our corporate and our media business, which represent roughly 5829% of total revenue, respectively. Corporate was strong with high single digit growth fueled by good performance in technology, business services, sport and fashion, as well as benefits from creative content deals that include some level of AI rights. Media was in low single digit growth with broadcast and production performance still not fully returned to 2023 levels.

Q2 revenue was $234,900,000 with year on year growth of 2.5% or 1.8% on a currency neutral basis. Included in these results are certain impacts of the timing of revenue recognition, which contributed approximately 70 basis points to Q2 growth. Subscription revenue was 53.5% of total revenue, up from 52.9% in Q2 of last year. In total, subscription revenue grew by 3.7% or 3% on a currency neutral basis, driven primarily by growth in our premium access offering. We added 39,000 active annual subscribers to reach 321,000 in the Q2 LTM period, representing growth of approximately 14% over the comparable 2024 LTM period.

Annual subscriber growth continued to be driven by our e commerce businesses iStock and Unsplash Plus. Out of the 321,000 annual subscribers in the period, 52% were brand new customers, and 26% were customers in our growth markets across EMEA, APAC, and LATAM. The annual subscription revenue retention rate was 93.4% in the Q2 LTM period, up 400 basis points from 89.4% in the corresponding 2024 period and also up from 92.7% in the Q1 LTM period. This metric is continuing to normalize as we lap the adverse impacts from the dual Hollywood strikes, see the benefits from the acceleration in our corporate business, as well as the anticipated impacts from a leveling off of the growth rate of smaller e commerce subscribers, which have lower revenue retention rates. We should continue to see stabilization in this metric relative to 2024 as we navigate through the balance of 2025.

Paid downloads were down slightly at 93,000,000, while our video attachment rate continues to steadily grow, rising to 16.7% from 15.6% in the prior year period. Rate of revenue was $130,800,000 down 5.1% year on year and 5.7 on a currency neutral basis. This decline is primarily driven by continued macro challenges impacting our agency business, which sits entirely within creative and was down 10% in Q2. Outside of agency, we see steady momentum in creative across premium access, video, and our Unslash plus subscription. Editorial revenue was $88,300,000 growing 5.6% year on year and 4.6% on a currency neutral basis.

Strong demand for news and sport was primarily driven by our outstanding coverage, as Craig noted, of major events such as FIFA’s Club World Cup and Formula One racing, as well as global news events such as the election of Pope Leo the fourteenth. Other revenue was $15,700,000 an increase of $8,100,000 from Q2 ’twenty four, driven primarily by three new multi year creative content deals that included some level of AI rights. As with other similar agreements signed over this past year, these deals carry heavier upfront revenue recognition. Across our major geographies, we posted currency neutral revenue growth of 7.2% in The Americas, with growth across corporate and media, including some of the creative content with AI rights deals in in the quarter, while EMEA was down 6% as the prior year benefited from revenue from a large nonrecurring assignment, and APAC was down 1.1%. Revenue less our cost of revenue as a percentage of revenue remained strong at 72.1% compared with 72.5% in 2024.

SG and A expense was $105,100,000 up $3,800,000 year on year, with our expense rate increasing to 44.7% of revenue from 44.2% last year. Excluding stock based compensation, SG and A increased to $101,300,000 in the quarter or 43.1% of revenue, up from $97,200,000 or 42.4% of revenue in 2024. This increase in SG and A relates primarily to professional fees tied to the acceleration of our SOX compliance efforts and for the ongoing litigation with stability.ai with the trial portion of The UK lawsuit in Q2. Adjusted EBITDA was $68,000,000 for the quarter, down 1.2% or 2.2% on a currency neutral basis. Adjusted EBITDA margin was 28.9% compared to 30% in Q2 twenty twenty four.

CapEx was 16,100,000 up $700,000 year over year. CapEx as a percentage of revenue was 6.9% compared to 6.7% in the prior year period, still well within our expected range of 5% to 7% of revenue. This year on year increase reflects the timing of payments for routine CapEx spend. Adjusted EBITDA less CapEx was $51,900,000 down $1,500,000 year over year, representing a decrease of 3% or 2% on a currency neutral basis. Adjusted EBITDA less CapEx margin was 22.1% compared to 23.3% in 2024.

Free cash flow was negative $9,600,000 compared to positive $31,100,000 in Q2 twenty twenty four, primarily due to the impact of cash outflows tied to merger and legal related expenses and an increase in cash taxes paid. Free cash flow is stated net of cash interest expense of $17,500,000 and cash taxes paid of 18,900,000.0 We finished the quarter with $110,300,000 of balance sheet cash, down $11,400,000 from the Q2 twenty twenty four ending balance and down $4,300,000 from Q1 twenty twenty five. The lower cash balance relative to 2024 primarily reflects the impacts of voluntary debt paydowns, quarterly amortization payment on our euro term loan, and fees related to the refinancing transactions, all of this partially offset by the positive impact from FX. In May, we completed a voluntary loan to Bond Exchange, replacing $540,000,000 of the 11.25 percent USD term loan with equivalent 11.25% senior notes maturing in February 2030. As of June 30, we had total debt outstanding of $1,390,000,000 which includes $540,000,000 of 11.25% senior notes, dollars $510,000,000 of Euro term loans converted using exchange rates as of 06/30/2025, with an applicable rate of 7.94%, 40,000,000 of USD term loan at 11.25% fixed rate and 300,000,000 of 9.75 senior notes.

We have a $150,000,000 revolver that remains undrawn. Our net leverage was 4.3 times at the end of Q2 compared to 4.2 times in Q2 twenty twenty four. That slight uptick in net leverage primarily reflects the impact of the weaker dollar on the value of our euro term loan. We continue to assess market conditions with respect to any potential refinancing or redemption of the $300,000,000 of bonds, which are set to mature in March 2027. Considering the foreign exchange rates and applicable interest rates on our debt balance as of June 30 and factoring in the quarterly amortization payment on the euro term loan, our estimated cash interest expense for 2025 is $123,100,000 This reflects approximately a $10,000,000 reduction from the Q1 earnings call estimate due to the timing impact of the loan to bond exchange, which shifted a portion of interest payments from monthly or quarterly payments to semiannual payments, effectively moving some payments from 2025 into 2026.

In summary, we feel good about financial performance this quarter, and we will continue to emphasize execution, fiscal discipline, and momentum building into the back half of this year. Turning to our outlook for the full year 2025, which with respect to year on year currency neutral performance remains unchanged from the guidance provided in Q1 twenty twenty five. Taking into consideration the impact of the weaker dollar and assuming full year 2025 FX rates with the Euro at 1.1 and the GBP at 1.3, we anticipate revenue of $931,000,000 to $968,000,000 down 0.9% to up 3.1% year on year. On a currency neutral basis, this represents a decrease of 1% to an increase of 3%. As we think about cadence, we expect tougher year on year comparisons to flatten growth in the 2025.

In addition, our guidance reflects a $1,000,000 impact from FX, inclusive of the $2,500,000 headwind in the first half, which will be offset by a benefit for the rest of 2025, including an estimated $2,000,000 in the third quarter. We expect adjusted EBITDA of $277,000,000 to $297,000,000 down 7.6% to 1.2% year on year and 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 $500,000 tailwind in 2025, inclusive of a $900,000 headwind from the 2025, offset by a tailwind across the remainder of the year, including an estimated $700,000 in the third quarter. Please note this guidance reflects the anticipated impacts of the odd year versus even year editorial events calendar comparisons largely impacting the 2025, as well as the impact from disruptions in production activity due to the Los Angeles fires and some continued lag in a return to pre Hollywood strike production levels. The Hollywood strikes will also present tougher year on year comparisons in the 2025, as year on year growth in the 2024 benefited from the comps to a strike impacted 2023.

On the cost side, our guidance continues to include approximately $8,000,000 in one off increases in SG and A for SOX acceleration efforts, which were previously disclosed in our Q4 earnings calls. These are largely concentrated in the Q2 through Q4 periods with approximately $5,500,000 expected in the 2025. Please note, all other merger related costs are excluded from 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 tariffs and other global macroeconomic conditions remain unknown and may not be fully reflected in this guidance. With that, operator, please open the call for questions.

Operator: Thank you. At this time, we will open the floor for questions. And we’ll take our first question from Mark Kuszewski with Benchmark.

Mark Kuszewski, Analyst, Benchmark: Jen, just a couple top line questions. One, looks like we’ve been witnessing sort of an economy the past couple of quarters between weakening creative and strengthening data licensing. And I was hoping you could maybe rectify comments that you made in terms of strength in corporate media relative to the subscription results that you saw in the quarter? And then what’s implied in the second half for Creative and Data Licensing in your ’25 guide? And then I just had one quick follow-up.

Thanks.

Jen Layden, Chief Financial Officer, Getty Images: Yeah, so I think creative decline of about 5% fairly consistent with what we saw Q1. Drivers there are really going to be the same as what we talked about in Q1. So it’s predominantly going to be agency impacting that creative performance for us in these two quarters. So for our year to date, our agency sits entirely within that creative number. Editorial, last year, as you know, we had a pretty hefty event calendar year.

We have some events that are falling into the first half of this year, but certainly to a lesser degree. So as we mentioned in the prepared remarks, as we get into that second half, you’re going to start to see a more challenging year on year comp on the editorial side of the business. That other revenue, you’re right, that continues to be a good performance for us. That $16,000,000 this quarter, I think that’s the highest we have seen for that other revenue bucket, although we’ve come close in prior quarters. You know, those are deals with existing customers for the most part who sit in that corporate space.

And those are gonna be, you know, content licensing deals with some expansion into AI rights. So there’s a little bit of a convergence there between creative, other corporate, all setting, you know, within our ability to get those bigger other deals done. Not expecting, you know, anything different than what we’ve said in the past in terms of that other revenue bucket in 2025 being very low single digits in terms of percentage of total revenue. So no change there from prior comments. Creative agency, we’ll see what happens there.

Think if you listen to and I know you do Mark and follow some of those bigger agency performances, it’s a challenge. And we are certainly seeing that there but I think we continue to see good momentum outside of agency and creative and that is again on that corporate side of the business and subscriptions, right? We’re seeing those subscriptions continue to grow. A good majority of those do sit in that corporate space.

Mark Kuszewski, Analyst, Benchmark: Okay. Thanks. And Jen, maybe just on the flip side of that, you talk about agency weakness, but you also saw some really strong growth on the non subscription side or a la carte side. So can you perhaps rectify the comment on just overall senior agency weakness, but yet seeing relatively good a la carte strength?

Jen Layden, Chief Financial Officer, Getty Images: I I don’t think I said we saw good a la carte performance. You know, the agency business is is practically all a la carte. So as the agency goes largely, so does a la carte on the creative side of things. Editorial a la carte, that continues to perform well. But that agency impact is felt pretty materially in that creative a la carte number.

So I don’t think I said a la carte performed well.

Mark Kuszewski, Analyst, Benchmark: Okay. I was just looking at your non backing out your non subscription revenue, which I assume most of it’s a la carte. And overall, that was a healthy uptick in in the June by a good, I don’t 15,000,000 or so.

Jen Layden, Chief Financial Officer, Getty Images: Yes, we can work through that Mark perhaps in the post call follow-up but I think

Mark Kuszewski, Analyst, Benchmark: that’s a

Jen Layden, Chief Financial Officer, Getty Images: great of all the parts that definitely wasn’t in growth.

Mark Kuszewski, Analyst, Benchmark: Okay, thank you.

Operator: Thank you. We’ll take our next question from Ron Josey with Citi.

Jake, Analyst, Citi: Hey, thanks for taking the question. This is Jake on for Ron. First, I wanted to ask about the subscription mix shift. We saw a nice uptick in the subscription mix shift and the retention rate ticking back up to, I think, 93.4%. So I first just really wanted to dig in to the key drivers of that uptick.

And then second question on the litigation with Stability AI. Understood, can’t really get into specifics. But with SCETI dropping the copyright infringement claims in The UK, really just wanted to better understand the strategic differences between the jurisdictions and whether there’s anything to share about your confidence level in The US case. Thanks.

Craig Peters, Chief Executive Officer, Getty Images: Sure, Jake. And we hope Ron is somewhere nice on a beach somewhere. Jen, do you want to take the first and I’ll take the second?

Jen Layden, Chief Financial Officer, Getty Images: Yep. So on the subscription side of things, that continues to be us tracking to continue to inch that higher and higher over the 50% mark. So we saw that again this quarter, really seeing that growth come largely from our e commerce subscription. So on the iStock side of things, to see good momentum on the Unsplash plus subscription, which is the, you know, newest of our subscription offerings, so to speak. And Prevenexis, our largest subscription, just about a third of our revenues, that continues to grow nicely as well.

So it’s a bit

Operator: of a

Jen Layden, Chief Financial Officer, Getty Images: continuation of the story there on the creative side of things. You know, that corporate growth that we’re seeing this quarter that certainly underpins that subscription momentum. And on revenue retention, so, yeah, this this was a a good uptick for us to see and I think we’ve been hinting at seeing this metric start to come back. So it’s good to see those numbers sit where they are. So at about 93 prior year period same time about 89%.

And we cited some of the drivers there certainly seeing us lapping the impact from those Hollywood strikes that corporate growth. And as we see that growth in subscriber count on those smaller ecommerce subs start to stabilize, they come with a lower revenue retention rate, so that’ll help that mix. But I think an interesting thing here, you might know, Jake, you’ve been following us for a while, we have seen this metric be 100% plus in our history. So seeing that dip below 90 was quite unusual. But when we look in this number in this quarter, Premium Access, again, our largest subscription, we actually got that revenue retention for Premium Access back up over 100%.

Premium Access revenue retention hasn’t been over 100% since 2023. So that’s where you can really see some of those production impacts, strike impacts, right? Those big enterprise customers seeing that revenue retention rate really start to come back. That’s a very good sign for us.

Craig Peters, Chief Executive Officer, Getty Images: Great. Thanks, Jen. And on the litigation front, Jake, it’s one of the the world is not transparent with respect to the models and what they’re training on. And so when we launched litigation against stability, we launched it in two markets, The US and The UK. What we found through discovery in The UK as that case progressed, we found that there were clear indications that stability did train on our material.

However, that training, we did not have clear facts that that training happened in The UK. So that was the primary item that we dropped in The UK suit because obviously, given the law there, we didn’t have the facts in order to support that. But we did ultimately get visibility to where that training did take place. So we dropped it in The UK. We continue in The US.

That claim will come into play within The US. And we’re hopeful to get a positive outcome in The UK and other aspects of that, but really pursuing the training itself within The US. I know that’s a bit it can be a bit complex. And believe me, as the CEO and Jen as the CFO of a company, I have to spend in order to pursue these cases in two markets. And it’s less than ideal, but that’s the state of our world where there aren’t transparency requirements against these model providers.

So we have to kind of go on a hunting expedition in order to get this and spend money in order to do that.

Jake, Analyst, Citi: Understood. Thanks a lot.

Operator: Thank you. Showing no additional questions at this time. This will now conclude our second quarter Getty Images Holdings, Inc. 2025 earnings call. You may now

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