Getty Images Holdings, Inc. “Getty Images” or the “Company”) (NYSE:
GETY), a preeminent global visual content creator and marketplace,
today reported preliminary financial results for the second quarter
ended June 30, 2023.
“The second quarter was a more challenging
environment; however, we continue to see increased customer
commitment and content utilization, notably through growth in
subscriptions, new customers and in our Corporate sector,” said
Craig Peters, Chief Executive Officer for Getty Images. “The second
quarter also saw us launch major search improvements through
Natural Language search, providing significantly improved returns
against any customer query. We also continue to make progress in
developing a truly differentiated generative AI service that
addresses customers’ commercial needs and in introducing new AI
modification capabilities within our sites. We remain focused on
driving value and efficiencies for our customers through our highly
differentiated, industry-leading content and services, and
positioning Getty Images for long-term success.”
Second Quarter 2023 Financial
Summary:
- Revenue of
$225.7 million declined 3.3% year over year. On a currency neutral
basis, revenues decreased 2.0%.
- Creative
revenue of $141.3 million, down 3.7% year over year and 2.3% on a
currency neutral basis.
- Editorial
revenue of $80.3 million, down 3.2% year over year and 2.0% on a
currency neutral basis.
- Annual
Subscription Revenue as a percentage of total revenue grew to
51.8%, up from 48.2% in Q2’22 and up from a finish of 49% for the
full year 2022.
- Net Loss of $4.3 million, down from
Net Income of $38.7 million from Q2’22. Included in Q2’23 was a
$0.4 million unrealized gain related to the change in fair value of
the Company’s Euro term loan and a $0.6 million loss related to the
mark-to-market on an interest rate swap, compared with gains of
$29.3 million on the Euro term loan and $4.7 million on the
interest rate swap in Q2’22. Net Income Margin was (1.9%) compared
to 16.6% in Q2’22.
- Adjusted
EBITDA* of $66.5 million, down 10.3% year over year and 8.9% on a
currency neutral basis. Adjusted EBITDA Margin* was 29.5% compared
to 31.7% in Q2’22, due primarily to the decline in revenue and $7
million of incremental legal expenses related to ongoing
litigation.
- Adjusted EBITDA less capex* was
$52.5 million, down 12.3% year over year and down 10.5% on a
currency neutral basis.
Liquidity and Balance Sheet:
- Net cash
provided by operating activities of $41.9 million in Q2’23,
compared to $30.9 million in the prior year period.
- Free cash
flow* of $27.9 million in Q2’23, compared to $16.8 million in the
prior year period.
- Ending cash
balance on June 30, 2023 was $121.3 million, up $23.4 million from
the ending balance on December 31, 2022 and a decrease of $92.5
million from June 30, 2022. The year-over-year change in the cash
balance reflects total debt paydowns of $330.4 million on our USD
term loan through June 30, 2023.
- During the
quarter, the Company amended the Revolver, upsizing the facility to
$150.0 million and extending the maturity to May 4, 2028. The
Revolver remains undrawn, for total available liquidity of $271.3
million.
- The Company’s
total debt was $1.418 billion, which included $300.0 million in
senior notes and a term loan balance of $1.118 billion, consisting
of $662.2 million in USD and $456.1 million in USD equivalent of
Euros, converted using exchange rates as of June 30, 2023.
- On August 11,
2023, the Company made a voluntary repayment on the USD term loan
of $20.0 million from balance sheet cash. In line with its
commitment to further de-lever the balance sheet, the company has
utilized over 100% of free cash flow to repay $45.2 million of debt
year to date.
* Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted EBITDA less capex, and Free Cash Flow are non-GAAP
financial measures. Refer to the Reconciliation of GAAP and
Non-GAAP Financial Measures section below.
Key Performance Indicators
(KPIs)1,8
|
Last Twelve Months Ended June 30, |
|
20231 |
|
2022 |
|
Y/Y Change |
LTM total purchasing
customers (thousands)2 |
830 |
|
843 |
|
-1.6% |
LTM total active
annual subscribers (thousands)3 |
182 |
|
89 |
|
104.1% |
LTM paid download
volume (millions)4 |
94 |
|
93 |
|
1.1% |
LTM annual subscriber
revenue retention rate5 |
98.5% |
|
101.9% |
|
-340 bps |
Image collection
(millions)6 |
513 |
|
474 |
|
8.2% |
Video collection
(millions) 6 |
26 |
|
22 |
|
16.3% |
LTM video attachment
rate7 |
13.5% |
|
12.2% |
|
+130 bps |
|
|
Note: The Key Operating Metrics outlined are the
metrics that provide management with the most immediate
understanding of the drivers of business performance and our
ability to deliver shareholder return, track to financial targets
and prioritize customer satisfaction. Note, KPI comparisons to
periods prior to trailing twelve-months ended June 30, 2023 reflect
some COVID-19 impact.
Annual subscription - includes
all products with a duration of 12 months or longer1 Beginning
with the three months ended September 30, 2022, the Company made
two changes to its reporting that has some impact on reported
KPI’s. First, activity for LATAM, Turkey and Israel, which was
previously excluded from these metrics, is now included due to
completion of a system migration. Additionally, the method by which
we aggregate our customer accounts was updated to better align with
our internal sales CRM system. We have not restated historical
periods given the immaterial impact to the KPI’s, except for LTM
total active annual subscribers and LTM annual subscriber revenue
retention rate for which the legacy reporting format is detailed in
noted 2, 3 and 5 below.2 The count of total customers who made a
purchase within the reporting period based on billed revenue.
Absent the reporting changes noted in Note 1 above, LTM total
purchasing customers would have been 839 thousand.3 The count of
customers who were on an annual subscription product during the
reporting period. Absent the reporting changes noted in Note 1, LTM
total active annual subscribers would have been 162 thousand, up
82% year on year.4 A count of the number of paid downloads by our
customers in the reporting period. Excludes downloads from
Editorial Subscriptions, Editorial feeds and certain API structured
deals, including bulk unlimited deals. Excludes downloads starting
in Q3’22 tied to a two-year deal signed with Amazon in July 2022,
as the magnitude of the potential download volume over the deal
term could result in significant fluctuations in this metric
without corresponding impact to revenue in the same period.5 This
calculates retention of total revenue for customers on an annual
subscription product, comparing the customer’s total billed revenue
(inclusive of both annual subscription and non-annual subscription
products) in the LTM period to the prior LTM period. Absent the
reporting changes noted in Note 1 above, LTM annual subscriber
retention rate would have been 97.3%. 6 A count of the total
images and videos in our content library as of the reporting
date.7 A measure of the percentage of total paid customer
downloaders who are video downloaders. The underlying calculation
of this metric was changed vs. previously reported metrics. This
change was made to exclude the impact of downloader activity from
our free trial subscriptions which are skewed entirely to
stills-only content.8 The Company launched Unsplash+ during the
three months ended December 31, 2022. This new Unsplash
subscription is included within these KPI’s from the launch date
forward.
Second Quarter 2023 Business
Highlights:
- In partnership
with NVIDIA, made significant progress in bringing to market a
high-quality, commercially viable, fully-indemnified,
creator-responsible generative AI service, expected to launch late
Q3.
- Announced
exclusive, multi-year partnership with US Soccer and renewed
agreements with Major League Baseball and Tribeca Festival to
deliver an industry-leading service in the creation and
distribution of world‑class sports and entertainment content.
- Expanded
deployment of Natural Language search to better surface Getty
Images’ pre-shot content, now returning a much broader set of
high-quality results even against the most complex search
string.
Financial Outlook for Full Year
2023
“Looking ahead, we are updating our Full Year
2023 guidance to reflect our performance through the first half of
this year, ongoing macro-economic and Agency sector pressures,
expected impacts from the U.S. Hollywood strikes, as well as
litigation costs that are expected to be largely concentrated in
the first half of 2023,” said Jennifer Leyden, Chief Financial
Officer.
The following tables summarize Getty Images
updated fiscal year 2023 guidance:
|
Updated 2023 Guidance |
Prior 2023 Guidance |
Revenue |
$920 million to $935 million |
$936 million to $963 million |
Revenue Growth YoY |
-0.7% to 0.9% |
1.0% to 4.0% |
Revenue Growth, Currency Neutral |
-0.7% to 1.0% |
1.5% to 4.5% |
Adjusted EBITDA |
$292 million to $303 million |
$305 million to $315 million |
Adjusted EBITDA Growth YoY |
-3.8% to -0.3% |
0.4% to 3.6% |
Adjusted EBITDA Growth, Currency Neutral |
-3.8% to -0.3% |
0.7% to 4.0% |
Assuming foreign currency rates remain at current levels, the
guidance includes the following estimated and actual impacts from
FX on revenue and EBITDA:
|
FX Headwind |
FX Tailwind |
FX Impact |
|
1H 2023 (actual) |
Q3 2023 |
2H 2023 |
2023 |
Revenue |
($10.7) million |
~$3.0 million |
~$10.5 million |
(~$0.1) million |
Adjusted EBITDA |
($4.4) million |
~$1.0 million |
~$4.5 million |
~$0.1 million |
Preliminary Results and Extension of
10-Q FilingThe Company expects to file a Form 12b-25 with
the Securities and Exchange Commission to disclose that it will not
be able to file its Form 10-Q by its due date of August 14, 2023
and may not file within the 5-day extension period allowed by the
form. The delay in filing this Form 10-Q is due to the Company’s
independent auditors requiring time for additional audit processes
in response to a comment arising from an inspection of the audit
workpapers of the Company’s 2022 financial statements. As of this
date, we are not aware of, nor has our independent auditor advised
us of any material misstatement to the 2022 financial
statements.
Webcast & Conference Call
Information
The Company will host a conference call and live
webcast with the investment community at 5:00 p.m. Eastern Time
today, Monday, August 14, 2023, to discuss its preliminary second
quarter 2023 results. The live webcast will be accessible through
the Investor Relations section of the Company’s website at
https://investors.gettyimages.com/. To access the call through a
conference line, dial 1‑877‑407‑0792 (in the U.S.) or
1‑201‑689‑8263 (international callers). A replay of the conference
call will be posted shortly after the call and will be available
for fourteen days following the call. To access the replay, dial
1‑844‑512‑2921 (in the U.S.) or 1‑412‑317‑6671 (international
callers). The access code for the replay is 13740020.
About Getty Images
Getty Images (NYSE: GETY) is a preeminent global
visual content creator and marketplace that offers a full range of
content solutions to meet the needs of any customer around the
globe, no matter their size. Through its Getty Images, iStock and
Unsplash brands, websites and APIs, Getty Images serves customers
in almost every country in the world and is the first-place people
turn to discover, purchase and share powerful visual content from
the world’s best photographers and videographers. Getty Images
works with over 541,000 contributors and more than 310 content
partners to deliver this powerful and comprehensive content. Each
year Getty Images covers more than 160,000 news, sport and
entertainment events providing depth and breadth of coverage that
is unmatched. Getty Images maintains one of the largest and best
privately-owned photographic archives in the world with millions of
images dating back to the beginning of photography.
For company news and announcements, visit our
Newsroom.
Forward-Looking Statements
Certain statements included in this press
release that are not historical facts are forward-looking
statements for purposes of the safe harbor provisions under the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of the
words such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “forecast,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook,” “target” or similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. These forward-looking statements include, but
are not limited to, statements regarding estimates and forecasts of
other financial and performance metrics and projections of market
opportunity. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of our management and are not predictions of actual
performance. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as, and
must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of the Company.
These forward-looking statements are subject to
a number of risks and uncertainties, including: that the
preliminary results for the second quarter are preliminary and
subject to change pending the completion of the Company’s quarterly
closing process and review; the timing of our filing of the Form
10-Q for the quarter ended June 30, 2023; our inability to continue
to license third-party content and offer relevant quality and
diversity of content to satisfy customer needs; our ability to
attract new customers and retain and motivate an increase in
spending by its existing customers; the user experience of our
customers on our websites; the extent to which we are able to
maintain and expand the breadth and quality of our content library
through content licensed from third-party suppliers, content
acquisitions and imagery captured by its staff of inhouse
photographers; the mix of and basis upon which we license our
content, including the price-points at, and the license models and
purchase options through, which we license our content; the risk
that we operate in a highly competitive market; the risk that we
are unable to successfully execute our business strategy or
effectively manage costs; our inability to effectively manage our
growth; our inability to maintain an effective system of internal
controls and financial reporting; the risk that we may lose the
right to use “Getty Images” trademarks; our inability to evaluate
our future prospects and challenges due to evolving markets and
customers’ industries; the legal, social and ethical issues
relating to the use of new and evolving technologies, such as
Artificial Intelligence; the risk that our operations in and
continued expansion into international markets bring additional
business, political, regulatory, operational, financial and
economic risks; our inability to adequately adapt our technology
systems to ingest and deliver sufficient new content; the risk of
technological interruptions or cybersecurity vulnerabilities; the
inability to expand our operations into new products, services and
technologies and to increase customer and supplier awareness of new
and emerging products and services; the loss of and inability to
attract and retain key personnel that could negatively impact our
business growth; the inability to protect the proprietary
information of customers and networks against security breaches and
protect and enforce intellectual property rights; our reliance on
third parties; the risks related to our use of independent
contractors; the risk that an increase in government regulation of
the industries and markets in which we operate could negatively
impact our business; the impact of worldwide and regional
political, military or economic conditions, including declines in
foreign currencies in relation to the value of the U.S. dollar,
hyperinflation, higher interest rates, devaluation the impact of
recent bank failures on the marketplace and the ability to access
credit and significant political or civil disturbances in
international markets where we conduct business; the risk that
claims, lawsuits and other proceedings that have been, or may be,
instituted against us or our predecessors could adversely affect
our business; the inability to maintain the listing of our Class A
common stock on the New York Stock Exchange; volatility in our
stock price and in the liquidity of the trading market for our
Class A Common Stock; the lingering effects of the COVID-19
pandemic; changes in applicable laws or regulations; the risks
associated with evolving corporate governance and public disclosure
requirements; the risk of greater than anticipated tax liabilities;
the risks associated with the storage and use of personally
identifiable information; earnings-related risks such as those
associated with late payments, goodwill or other intangible assets;
our ability to obtain additional capital on commercially reasonable
terms; the risks associated with being an “emerging growth company”
within the meaning of the Securities Act of 1933, as amended; risks
associated with our reliance on information technology in critical
areas of our operations; our inability to pay dividends for the
foreseeable future; the risks associated with additional issuances
of Class A Common Stock without stockholder approval; costs related
to operating as a public company; and those factors discussed under
the heading “Item 1.A. Risk Factors” of our most recently filed
Annual Report on Form 10-K. If any of these risks materialize or
our assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements.
These and other factors that could cause actual
results to differ from those implied by the forward-looking
statements in this press release are more fully described under the
heading “Item 1.A. Risk Factors” in our most recently filed Annual
Report on Form 10-K and in our other filings with the SEC. The
risks described under the heading “Item 1.A. Risk Factors” in our
most recently filed Annual Report on Form 10-K are not exhaustive.
New risk factors emerge from time to time and it is not possible to
predict all such risk factors, nor can we assess the impact of all
such risk factors on our business or the extent to which any factor
or combination of factors may cause actual results to differ
materially from those contained in any forward-looking statements.
All forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by the
foregoing cautionary statements. We undertake no obligations to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
In addition, the statements of belief and
similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based upon information available to
us, as applicable, as of the date of this press release, and while
we believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain and
you are cautioned not to unduly rely upon these statements.
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share and per
share amounts, unaudited)
|
Three Months EndedJune 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUE |
$ |
225,675 |
|
|
$ |
233,327 |
|
|
$ |
461,317 |
|
|
$ |
464,305 |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSE: |
|
|
|
|
|
|
|
Cost of revenue (exclusive of
depreciation and amortization shown separately below) |
$ |
63,354 |
|
|
$ |
65,118 |
|
|
$ |
126,640 |
|
|
$ |
127,012 |
|
Selling, general and
administrative expenses |
|
107,723 |
|
|
|
95,528 |
|
|
|
210,118 |
|
|
|
188,681 |
|
Depreciation |
|
13,540 |
|
|
|
12,379 |
|
|
|
26,563 |
|
|
|
24,891 |
|
Amortization |
|
7,260 |
|
|
|
11,905 |
|
|
|
14,467 |
|
|
|
24,110 |
|
Other operating expense –
net |
|
332 |
|
|
|
862 |
|
|
|
611 |
|
|
|
3,568 |
|
Operating expense |
|
192,209 |
|
|
|
185,792 |
|
|
|
378,399 |
|
|
|
368,262 |
|
INCOME FROM OPERATIONS |
|
33,466 |
|
|
|
47,535 |
|
|
|
82,918 |
|
|
|
96,043 |
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE) INCOME,
NET: |
|
|
|
|
|
|
|
Interest expense |
|
(31,683 |
) |
|
|
(29,986 |
) |
|
|
(62,180 |
) |
|
|
(59,586 |
) |
(Loss) gain on fair value
adjustment for swaps and foreign currency exchange contract –
net |
|
(640 |
) |
|
|
4,979 |
|
|
|
(2,725 |
) |
|
|
17,105 |
|
Unrealized foreign exchange
(loss) gains – net |
|
(3,165 |
) |
|
|
31,191 |
|
|
|
(14,087 |
) |
|
|
38,234 |
|
Other non-operating income –
net |
|
634 |
|
|
|
198 |
|
|
|
1,122 |
|
|
|
355 |
|
|
|
|
|
|
|
|
|
Total other (expense) income – net |
|
(34,854 |
) |
|
|
6,382 |
|
|
|
(77,870 |
) |
|
|
(3,892 |
) |
(LOSS) INCOME BEFORE INCOME
TAXES |
|
(1,388 |
) |
|
|
53,917 |
|
|
|
5,048 |
|
|
|
92,151 |
|
INCOME TAX EXPENSE |
|
(2,889 |
) |
|
|
(15,222 |
) |
|
|
(6,122 |
) |
|
|
(28,349 |
) |
|
|
|
|
|
|
|
|
NET (LOSS) INCOME |
|
(4,277 |
) |
|
|
38,695 |
|
|
|
(1,074 |
) |
|
|
63,802 |
|
Less: |
|
|
|
|
|
|
|
Net (loss) income attributable
to noncontrolling interest |
|
(214 |
) |
|
|
167 |
|
|
|
293 |
|
|
|
375 |
|
Redeemable Preferred Stock
dividend |
|
— |
|
|
|
19,705 |
|
|
|
— |
|
|
|
38,552 |
|
NET (LOSS) INCOME ATTRIBUTABLE
TO GETTY IMAGES HOLDINGS, INC. |
$ |
(4,063 |
) |
|
$ |
18,823 |
|
|
$ |
(1,367 |
) |
|
$ |
24,875 |
|
|
|
|
|
|
|
|
|
Net (loss) income per share
attributable to Class A Getty Images Holdings, Inc. common
stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
(0.01 |
) |
|
$ |
0.10 |
|
|
$ |
— |
|
|
$ |
0.13 |
|
Diluted |
$ |
(0.01 |
) |
|
$ |
0.09 |
|
|
$ |
— |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
Weighted-average Class A
common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
397,417,290 |
|
|
|
196,107,293 |
|
|
|
396,368,132 |
|
|
|
196,105,637 |
|
Diluted |
|
397,417,290 |
|
|
|
219,623,285 |
|
|
|
396,368,132 |
|
|
|
220,575,440 |
|
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED BALANCE
SHEETS(In thousands, except share and par value
data, unaudited)
|
June 30,2023 |
|
December 31,2022 |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
121,308 |
|
|
$ |
97,912 |
|
Restricted cash |
|
4,274 |
|
|
|
4,482 |
|
Accounts receivable – net of allowance of $7,090 and $6,460,
respectively |
|
121,661 |
|
|
|
129,603 |
|
Prepaid expenses |
|
12,357 |
|
|
|
15,728 |
|
Taxes receivable |
|
10,604 |
|
|
|
11,297 |
|
Other current assets |
|
15,126 |
|
|
|
10,497 |
|
Total current assets |
|
285,330 |
|
|
|
269,519 |
|
PROPERTY AND EQUIPMENT –
NET |
|
176,713 |
|
|
|
172,083 |
|
RIGHT OF USE ASSETS |
|
43,311 |
|
|
|
47,231 |
|
GOODWILL |
|
1,501,190 |
|
|
|
1,499,578 |
|
IDENTIFIABLE INTANGIBLE ASSETS
– NET |
|
409,834 |
|
|
|
419,548 |
|
DEFERRED INCOME TAXES –
NET |
|
8,286 |
|
|
|
8,272 |
|
OTHER LONG-TERM ASSETS |
|
43,999 |
|
|
|
51,952 |
|
TOTAL |
$ |
2,468,663 |
|
|
$ |
2,468,183 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
90,540 |
|
|
$ |
93,766 |
|
Accrued expenses |
|
45,301 |
|
|
|
49,327 |
|
Income taxes payable |
|
7,900 |
|
|
|
8,031 |
|
Deferred revenue |
|
175,721 |
|
|
|
171,371 |
|
Total current liabilities |
|
319,462 |
|
|
|
322,495 |
|
LONG-TERM DEBT – NET |
|
1,414,549 |
|
|
|
1,428,847 |
|
LEASE LIABILITIES |
|
42,204 |
|
|
|
46,218 |
|
DEFERRED INCOME TAXES –
NET |
|
31,294 |
|
|
|
37,075 |
|
UNCERTAIN TAX POSITIONS |
|
33,073 |
|
|
|
37,333 |
|
OTHER LONG-TERM
LIABILITIES |
|
4,445 |
|
|
|
3,167 |
|
Total liabilities |
|
1,845,027 |
|
|
|
1,875,135 |
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
Class A common stock, $0.0001 par value: 2.0 billion shares
authorized; 398.8 million shares issued and outstanding as of
June 30, 2023 and 394.8 million shares issued and outstanding
as of December 31, 2022 |
|
40 |
|
|
|
39 |
|
Additional paid-in capital |
|
1,957,188 |
|
|
|
1,936,324 |
|
Accumulated deficit |
|
(1,283,721 |
) |
|
|
(1,282,354 |
) |
Accumulated other comprehensive loss |
|
(98,131 |
) |
|
|
(108,928 |
) |
Total Getty Images Holdings, Inc. stockholders’ equity |
|
575,376 |
|
|
|
545,081 |
|
Noncontrolling interest |
|
48,260 |
|
|
|
47,967 |
|
Total stockholders’ equity |
|
623,636 |
|
|
|
593,048 |
|
TOTAL |
$ |
2,468,663 |
|
|
$ |
2,468,183 |
|
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands, unaudited)
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net (loss) income |
$ |
(1,074 |
) |
|
$ |
63,802 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
|
26,563 |
|
|
|
24,891 |
|
Amortization |
|
14,467 |
|
|
|
24,110 |
|
Unrealized exchange loss
(gains) on foreign denominated debt |
|
9,065 |
|
|
|
(34,727 |
) |
Equity-based compensation |
|
18,009 |
|
|
|
3,130 |
|
Deferred income taxes –
net |
|
(5,796 |
) |
|
|
7,790 |
|
Uncertain tax positions |
|
(3,010 |
) |
|
|
109 |
|
Non-cash fair value adjustment
for swaps and foreign currency exchange contracts |
|
2,725 |
|
|
|
(16,244 |
) |
Amortization of debt issuance
costs |
|
1,960 |
|
|
|
3,122 |
|
Non-cash operating lease
costs |
|
3,920 |
|
|
|
5,486 |
|
Impairment of right of use
assets |
|
— |
|
|
|
2,563 |
|
Other |
|
1,524 |
|
|
|
2,777 |
|
Changes in current assets and
liabilities: |
|
|
|
Accounts receivable |
|
6,706 |
|
|
|
6,909 |
|
Accounts payable |
|
1,420 |
|
|
|
3,653 |
|
Accrued expenses |
|
(5,243 |
) |
|
|
(20,097 |
) |
Lease liabilities,
non-current |
|
(4,215 |
) |
|
|
(6,249 |
) |
Income taxes
receivable/payable |
|
(1,163 |
) |
|
|
(639 |
) |
Interest payable |
|
(130 |
) |
|
|
6,895 |
|
Deferred revenue |
|
5,616 |
|
|
|
3,723 |
|
Other |
|
2,439 |
|
|
|
(700 |
) |
Net cash provided by operating
activities |
|
73,783 |
|
|
|
80,304 |
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
Acquisition of property and
equipment |
|
(29,452 |
) |
|
|
(30,372 |
) |
Purchase of a minority
investment |
|
— |
|
|
|
(2,000 |
) |
Net cash used in investing
activities |
|
(29,452 |
) |
|
|
(32,372 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Repayment of debt |
|
(25,200 |
) |
|
|
(5,200 |
) |
Cash paid for debt issuance
costs |
|
(1,137 |
) |
|
|
— |
|
Proceeds from common stock
issuance |
|
4,898 |
|
|
|
29 |
|
Cash paid for settlement of
employee taxes related to exercise of equity-based awards |
|
(2,993 |
) |
|
|
— |
|
Cash paid for equity issuance
costs |
|
(150 |
) |
|
|
(4,741 |
) |
Net cash used in financing
activities |
|
(24,582 |
) |
|
|
(9,912 |
) |
|
|
|
|
EFFECTS OF EXCHANGE RATE
FLUCTUATIONS |
|
3,439 |
|
|
|
(11,178 |
) |
NET INCREASE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
23,188 |
|
|
|
26,842 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH – Beginning of period |
|
102,394 |
|
|
|
191,529 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH – End of period |
$ |
125,582 |
|
|
$ |
218,371 |
|
Non-GAAP Financial MeasuresIn
order to assist investors in understanding the core operating
results that our management uses to evaluate the business and for
financial planning, we present the following non-GAAP measures: (1)
Adjusted EBITDA, (2) Adjusted EBITDA Margin, (3) Adjusted EBITDA
less capex and (4) Free Cash Flow. The presentation of this
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with U.S. GAAP.
The Company believes that these measures are relevant and
provide useful information widely used by analysts, investors and
other interested parties in our industry to provide a baseline for
evaluating and comparing our operating performance, and in the case
of free cash flow, our liquidity results. We also evaluate our
revenue on an as reported (U.S. GAAP) and currency neutral basis.
We believe presenting currency neutral information provides
valuable supplemental information regarding our comparable results,
consistent with how we evaluate our performance internally.
Reconciliations of these non-GAAP measures to the most
comparable GAAP measures are provided below.
The Company does not reconcile its forward-looking non-GAAP
financial measures to the corresponding U.S. GAAP measures, due to
variability and difficulty in making accurate forecasts and
projections and/or certain information not being ascertainable or
accessible; and because not all of the information, such as foreign
currency impacts necessary for a quantitative reconciliation of
these forward-looking non-GAAP financial measures to the most
directly comparable U.S. GAAP financial measure, is available to
the Company without unreasonable efforts. For the same reasons, the
Company is unable to address the probable significance of the
unavailable information. The Company provides non-GAAP financial
measures that it believes will be achieved, however it cannot
accurately predict all of the components of the adjusted
calculations and the U.S. GAAP measures may be materially different
than the non-GAAP measures.
Reconciliation of Adjusted EBITDA,
Adjusted EBITDA Margin, and Adjusted EBITDA less
capex
(in thousands) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income |
|
$ |
(4,277 |
) |
|
$ |
38,695 |
|
|
$ |
(1,074 |
) |
|
$ |
63,802 |
|
Add/(less) non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
$ |
20,800 |
|
|
$ |
24,284 |
|
|
$ |
41,030 |
|
|
$ |
49,001 |
|
Other operating expense –
net |
|
$ |
332 |
|
|
$ |
862 |
|
|
$ |
611 |
|
|
$ |
3,568 |
|
Interest expense |
|
$ |
31,683 |
|
|
$ |
29,986 |
|
|
$ |
62,180 |
|
|
$ |
59,586 |
|
Fair value adjustments,
foreign exchange and other non operating expense (income) 1 |
|
$ |
3,171 |
|
|
$ |
(36,368 |
) |
|
$ |
15,690 |
|
|
$ |
(55,694 |
) |
Income tax expense |
|
$ |
2,889 |
|
|
$ |
15,222 |
|
|
$ |
6,122 |
|
|
$ |
28,349 |
|
Equity-based compensation
expense |
|
$ |
11,876 |
|
|
$ |
1,390 |
|
|
$ |
18,009 |
|
|
$ |
3,131 |
|
Adjusted EBITDA |
|
$ |
66,474 |
|
|
$ |
74,071 |
|
|
$ |
142,568 |
|
|
$ |
151,743 |
|
Capex |
|
$ |
(13,927 |
) |
|
$ |
(14,137 |
) |
|
$ |
(29,452 |
) |
|
$ |
(30,372 |
) |
Adjusted EBITDA less
capex |
|
$ |
52,547 |
|
|
$ |
59,934 |
|
|
$ |
113,116 |
|
|
$ |
121,371 |
|
Net (loss) income margin |
|
(1.9 |
)% |
|
|
16.6 |
% |
|
(0.2 |
)% |
|
|
5.4 |
% |
Adjusted EBITDA Margin |
|
|
29.5 |
% |
|
|
31.7 |
% |
|
|
30.9 |
% |
|
|
32.7 |
% |
(1) Fair value adjustments for our swaps and
foreign currency exchange contracts, foreign exchange gains
(losses) and other insignificant non-operating related expenses
(income).
Reconciliation of Free Cash
Flow
(in millions) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
41.9 |
|
|
$ |
30.9 |
|
|
$ |
73.8 |
|
|
$ |
80.3 |
|
Acquisition of property and equipment |
|
$ |
(13.9 |
) |
|
$ |
(14.1 |
) |
|
$ |
(29.5 |
) |
|
$ |
(30.4 |
) |
Free Cash Flow |
|
$ |
27.9 |
|
|
$ |
16.8 |
|
|
$ |
44.3 |
|
|
$ |
49.9 |
|
OTHER FINANCIAL DATA
Revenue by Product
(In thousands) |
|
Three Months Ended June 30, |
|
increase / (decrease) |
|
|
2023 |
|
% of revenue |
|
2022 |
|
% of revenue |
|
$ change |
|
% change |
|
CN % change |
Creative |
|
|
141,281 |
|
62.6 |
% |
|
|
146,669 |
|
62.9 |
% |
|
|
(5,388 |
) |
|
(3.7 |
)% |
|
(2.3 |
)% |
Editorial |
|
|
80,281 |
|
35.6 |
% |
|
|
82,945 |
|
35.5 |
% |
|
|
(2,663 |
) |
|
(3.2 |
)% |
|
(2.0 |
)% |
Other |
|
|
4,113 |
|
1.8 |
% |
|
|
3,713 |
|
1.6 |
% |
|
|
400 |
|
|
10.8 |
% |
|
12.4 |
% |
Total
revenue |
|
$ |
225,675 |
|
100.0 |
% |
|
$ |
233,327 |
|
100.0 |
% |
|
$ |
(7,652 |
) |
|
(3.3 |
)% |
|
(2.0 |
)% |
(In thousands) |
|
Six Months Ended June 30, |
|
increase / (decrease) |
|
|
|
2023 |
|
% of revenue |
|
|
2022 |
|
% of revenue |
|
$ change |
|
% change |
|
CN % change |
Creative |
|
|
287,778 |
|
62.4 |
% |
|
|
295,067 |
|
63.6 |
% |
|
|
(7,289 |
) |
|
(2.5 |
)% |
|
(0.2 |
)% |
Editorial |
|
|
164,906 |
|
35.7 |
% |
|
|
161,698 |
|
34.8 |
% |
|
|
3,208 |
|
|
2.0 |
% |
|
4.4 |
% |
Other |
|
|
8,633 |
|
1.9 |
% |
|
|
7,540 |
|
1.6 |
% |
|
|
1,093 |
|
|
14.5 |
% |
|
17.5 |
% |
Total
revenue |
|
$ |
461,317 |
|
100.0 |
% |
|
$ |
464,305 |
|
100.0 |
% |
|
$ |
(2,988 |
) |
|
(0.6 |
)% |
|
1.7 |
% |
Balance Sheet &
Liquidity
($ millions) |
|
June 30, 2023 |
|
Dec 31, 2022 |
|
Jun 30, 2022 |
Cash & Cash Equivalents1 |
|
$ |
121.3 |
|
$ |
97.9 |
|
$ |
213.8 |
Available under Revolving
Credit Facility2 |
|
$ |
150.0 |
|
$ |
80.0 |
|
$ |
80.0 |
Liquidity |
|
$ |
271.3 |
|
$ |
177.9 |
|
$ |
293.8 |
Term Loans Outstanding - USD
Tranche |
|
$ |
662.2 |
|
$ |
687.4 |
|
$ |
992.6 |
Term Loans Outstanding - EUR
Tranche3 |
|
$ |
456.1 |
|
$ |
447.0 |
|
$ |
438.9 |
Total Balance - Term Loans
Outstanding4 |
|
$ |
1,118.30 |
|
$ |
1,134.4 |
|
$ |
1,431.5 |
Senior Notes |
|
$ |
300.00 |
|
$ |
300.0 |
|
$ |
300.0 |
1 Excludes restricted cash of $4.3 million as of June 30, 2023,
$4.5 million as of December 2022 and $4.6 million as of June 30,
2022.2 Our new Revolving Credit Facility was effective May, 2023
and matures May, 2028. The prior Revolving Credit Facility was
effective February 2019 and was scheduled to mature February 2024
prior to the recent extension.
3 Face Value of Debt is 419M EUR. Converted
using the FX spot rate as of June 30, 2023 of 1.09, December 31,
2022 of 1.07, and June 30, 2022 of 1.05.4 Represents face value of
debt, not GAAP carrying value.
Investor Contact:
Getty ImagesSteven
KannerInvestorrelations@gettyimages.com
Media Contacts:
Getty ImagesJulia
HolmesJulia.Holmes@gettyimages.com
Getty Images (NYSE:GETY)
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