Good afternoon, and welcome to Getty Images Fourth Quarter and Full Year 2024 Earnings Conference Call. Today's call is being recorded. We have allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Steven Kanner, VP of Investor Relations and Treasury at Getty Images. Thank you. You may begin.

Good afternoon, and welcome to the Getty Images fourth quarter and full year 2024 earnings call. Joining me on today's call are Craig Peters, Chief Executive Officer; and Jenn Leyden, 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 for the fourth quarter Shutterstock operating results. We appreciate your understanding and we'll share updates as soon as variable. This call will include forward-looking statements with 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 in today's press release can be found on our Investor Relations website at investors.gettyimages.com. During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA less CapEx and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe 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.

Thanks, Steven and thanks to everyone for taking the time to join us today. I will touch on Q4 and full year 2024 business performance and progress before Jenn takes you through the full results in more detail and the 2025 outlook. I'd like to start by briefly touching on the merger with Shutterstock. As announced earlier this year, Getty Images and Shutterstock entered into a definitive merger agreement that will result in a company with a strong financial foundation and opportunities for superior value creation for customers, creators and our combined shareholder base. This is an exciting and transformational opportunity for our companies at a time when Getty Images is building positive organic performance momentum as evidenced in the results we will take you through today. I was also pleased to complete a refinancing on our term loans in this quarter, which extended maturities on $1 billion of debt to 2030, Jenn will share more details on this transaction. Moving to results. In the fourth quarter, we grew revenue to $247.3 million, representing growth of 9.5% or 8.5% on a currency neutral basis. The top line performance was coupled with strong profitability with adjusted EBITDA rising to $80.6 million, up 11.7% or 10.4% on a currency-neutral basis. For the full year 2024, revenue was $939.3 million, an increase of 2.5% on both the reported and currency-neutral basis. Our adjusted EBITDA finished at $300 million for the full year with a healthy margin at 32% of revenue. With these results we delivered on the full year return to top-line growth, exceeding the midpoint of our guidance and finished the year with a strong Q4. Just this last week Getty Images celebrated its 30th year in business. Over those 30 years we built a respected brand. We produced and preserved iconic…

We continue to build momentum as we move through 2024 culminating in a strong finish to the year with a strong Q4 financial performance. We delivered high single-digit top-line growth while maintaining north of 30% adjusted EBITDA margins. We surpassed both the midpoint of the updated guidance we shared on our last call and the guidance we started the year with. Q4 revenue was $247.3 million with year-on-year growth of 9.5% or 8.5% on a currency-neutral basis. Full year revenue was $939.3 million, up 2.5% on both a reported and a currency-neutral basis. Geographically, the Americas region our largest region with respect to revenue was up 15.9% in Q4 on a currency-neutral basis, with APAC also up 0.4%, and EMEA down just under 1%. Annual subscription revenue was 54.9% of total revenue in the fourth quarter. Subscription revenue grew approximately 11% on both a reported and a currency-neutral basis. This growth was driven by our premium access and our e-commerce subscription offerings. We added 78,000 active annual subscribers to reach 314,000 in the Q4 LTM period, an increase of approximately 33% over the comparable LTM period. This was driven by our e-commerce businesses iStock and Unsplash+. Of the 314,000 annual subscribers in the LTM period 54% were brand-new customers and 32% were customers in our key growth markets across LatAm, APAC and EMEA. Our annual subscription revenue retention rate continues to strengthen at 92.9% in the 2024 LTM period, up from 92.4% in the corresponding 2023 period, and also up from 92.2% in LTM Q3 2024. Paid downloads were down slightly at $93 million, while our video attachment rate remains in growth rising to 16.5% from 14.1% in the Q4 2023 LTM period. Q4 editorial was $90.1 million, an increase of 19% year-on-year, and 17.7% on a currency-neutral basis. This…

[Operator Instructions]. We'll take our first question from Cory Carpenter with JPMorgan. Your line is open.

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

Great. Thanks, Cory. I will take the first and leave the second to Jenn. On the AI take-up, we continue to see take-up of the AI service both on Getty Images and on iStock. I would say, it continues to grow but at a relatively modest pace, which from all accounts seems to match kind of corporate adoption of generative generally in terms of end deployment within the business versus internal deployment within the business. And where we're seeing that take-up is largely with existing customers using the capability not to generate from a text prompt, but to utilize the technology to modify the imagery. And that's been something that has kind of exceeded our expectations in terms of how customers are adopting it and using it. In the fall, we launched the ability to insert products into the imagery. And that's been really received well across the customer base. And it's addressing something that they haven't historically been able to do with our imagery on the creative side of things. And at least do that without significant effort. And so this is something that really simplifies that down. But it continues to be there, but the core value that we continue to deliver is on pre-shop. And we see those two really being complementary with the customer base. And so we're pleased to kind of continue to roll out those capabilities leveraging the technology that really help our customers save time and money.

And Cory, I'll take the question on Q4. So, I mean, the good part about the Q4 performance is really it was driven by a strong top line. So you mentioned a bit of improvement on EBITDA. That's really mostly about a drop-through of strong top line performance a bit of favorability on the gross margin side, which is almost always for us a product mix story. And that can vary a bit quarter-to-quarter. But as you know, we're always within roughly that 72% to 73% range. So, some favorability there on margin. And then that top line was a few different things. Obviously, as we move through the year, we continued, as we indicated to see that production side of things start to come back still not quite fully back to pre-strike levels. But for sure, we saw that come back in Q3, Q4 some nice year-on-year comps there, as we comp to the 2023 -- second half of 2023 that was really adversely impacted by the strikes. Event year calendar continued to see some strong momentum from that in Q4 as well as Q3. And we mentioned some of the -- a couple of content deals that included an AI licensing element that also impacted Q4. As we've spoken about before those tend to come with heavy upfront revenue recognition. So a few different things driving revenue, but ultimately that profitability story is a drop-through of strong top line.

Great. Thank you very much.

Yeah.

We'll take our next question from Mark Zgutowicz with The Benchmark Company. Your line is open.

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

Jenn, do you want to take the first two and I can maybe provide some commentary on the Agency, front?

Yeah. Hey Mark, so we don't guide at that segment or product level. Broadly speaking, I think Agency for us we've spoken before we don't anticipate Agency suddenly flipping into a growth part of our business. We'd hope to see, sort of a continued stabilization on that side of things. Media I mentioned we're still not back to pre-Hollywood strike levels. That's more broadly the industry not just us. So probably still a little bit of improvement to go there as we navigate through that, but we do have unfortunately the new impact from the L.A. fires on that segment. So we'll see what that does, but definitely seeing a bit of slowdown delays on the production side of things as it relates to the impact of those fires. And of course Corporate for us, always our biggest opportunity for growth, so we'd expect to continue to see that into growth. On the Data Licensing side, again, there we don't guide to a specific number there. Nothing heroic assumed in our guidance there, a bit of a continuation of the levels that we saw in 2024, which by all accounts is fairly modest but the guidance is not dependent on that becoming a very large piece of our business.

Thanks, Jenn, yeah, low-single digits there. And then, I would say just one of the things that we're watching is we are watching the creative agencies, Mark. Wpp put out their performance for Q4 and for the full year. Their full year Creative Agency part of their business was down about 4%, but their Q4 was down around 6.5%. And so it looked like it got a little softer in Q4. And it seems like that, that we're still kind of processing across the full Agency space, but that seems indicative. So -- which aligns to kind of some of the commentary that Jenn had about our Q4, where we continue to see that portion of our business down. And so we're kind of watching a little bit. Obviously, right now, there is a lot of uncertainty in the macro sense. And so that tends to show up first in the agency side of things. So -- but as Jenn highlighted, we've kind of factored those into our guidance. to our best of ability at this point. But that is typically the area where we see impacts more earlier and more acute where the rest of our business is much more heavily weighted into subscriptions and much more stable in terms of the usage and everything there.

That's helpful. And on the subscription side, it was nice to see that net retention number continue to improve. So I appreciate all the color. Thanks.

Yeah. And that should continue. Again, we're getting -- as we kind of mentioned within our e-commerce business, we were pushing a lot into first year cohorts and that those cohorts just aren't as -- we don't retain at the same level as later-stage cohorts. And we're seeing that already within the cohorts as we move into kind of year two and such, the cohorts look identical to more seasoned cohorts, older cohorts in the business. So yeah, we should continue to see that.

Great. Thank you.

[Operator Instructions] And it does appear that there are no further questions at this time. This does conclude today's program. Thank you for joining. You may disconnect at any time.

Thank you.