Getty Images Holdings Inc.
11/10/2025 | Press release | Distributed by Public on 11/10/2025 15:26
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated or the context otherwise requires, references in this section to the "Company," "Getty Images," "we," "us," "our" and other similar terms refer to Getty Images Holdings, Inc. and its subsidiaries.
The following discussion and analysis of the financial condition and results of operations of Getty Images should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The discussion should also be read together with the "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q, and the "Item 1A. Risk Factors" section and historical audited annual consolidated financial statements of Getty Images Holdings, Inc. as of December 31, 2024 and 2023 and the respective notes thereto, included in our most recently filed Annual Report on Form 10-K (the "2024 Form 10-K").
We qualify as a "smaller reporting company" because the market value of our shares of Class A common stock held by non-affiliates was less than $250 million as of the end of our most recently completed second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
Cautionary Note Regarding Forward-Looking Statements
Certain statements included in this Quarterly Report on Form 10-Q 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 report, 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 our control.
These forward-looking statements are subject to a number of risks and uncertainties, including:
•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 our existing customers;
•our ability to grow our subscriptions business;
•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 our staff of in-house 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 and machine learning (collectively, "AI"), including statements regarding AI and innovation momentum;
•the increased use of AI applications such as generative AI technologies that may result in harm to our brand, reputation, business, or intellectual property;
•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 breaches, incidents, and vulnerabilities;
•the risk that any prolonged strike by, or lockout of, one or more of the unions that provide personnel essential to the production of films or television programs, such as the 2023 strike by the writers' union and the actors' unions and including its lingering effects, could impact our entertainment business;
•the inability to expand our operations into new products, services and technologies and to increase customer and supplier awareness of our new and emerging products and services, including with respect to our AI initiatives;
•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, trade wars and restrictions, tariffs, devaluation, the impact of 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, judgements, lawsuits and other proceedings that have been, or may be, instituted against us or our predecessors, including pending lawsuits brought against us by former warrant holders, 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 impact of any widespread outbreak of an illness, pandemic or other local or global health issue, natural disasters, or climate change;
•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" and "smaller reporting company" within the meaning of the U.S. securities laws;
•risks associated with our reliance on information technology in critical areas of our operations;
•our potential inability to pay dividends for the foreseeable future;
•the risks associated with additional issuances of Class A common stock without stockholder approval;
•risks related to our proposed merger with Shutterstock, Inc. ("Shutterstock");
•costs related to operating as a public company; and
•other risks and uncertainties identified in "Item 1A. 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 report are more fully described under the heading "Item 1A. Risk Factors" in our 2024 Form 10-K and in our other filings with the SEC. The risks described under the heading "Item 1.A. Risk Factors" in our 2024 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 report, 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.
Recent Developments
Merger Agreement with Shutterstock
On January 6, 2025, Getty Images entered into an Agreement and Plan of Merger (the "Merger Agreement") to combine in a merger-of-equals transaction with Shutterstock. Subject to terms and conditions in the Merger Agreement, the aggregate consideration to be paid by Getty Images in respect of the outstanding shares of common stock of Shutterstock will be:
•An amount in cash equal to the product of $9.50 multiplied by the number of shares of Shutterstock common stock outstanding immediately prior to the transaction close (including vested Shutterstock restricted stock units and performance stock units) (the "Total Cash Amount"); and
•A number of shares of our Class A common stock equal to the product of 9.17 multiplied by the number of shares of Shutterstock common stock outstanding immediately prior to the transaction close (including vested Shutterstock restricted stock units and performance stock units) (the "Total Stock Amount").
Each of the Total Cash Amount and the Total Stock Amount will be fixed as of immediately prior to closing of the Merger. Therefore, cash elections will be subject to proration if cash elections are oversubscribed and stock elections will be subject to proration if stock elections are oversubscribed.
Each holder of Shutterstock common stock immediately prior to the transaction close will have the option to receive, subject to proration, for each share of Shutterstock common stock held by such holder:
•Cash consideration of $9.50 and 9.17 shares of our Class A common stock;
•Cash consideration of $28.8487; or
•13.67237 shares of our Class A common stock.
Following the close of the transaction, based on the common shares outstanding as of September 9, 2025, Getty Images stockholders will own approximately 53.5% and Shutterstock stockholders will own approximately 46.5% of the combined company on a fully diluted basis. The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and other customary closing conditions.
During the three and nine months ended September 30, 2025, Getty Images has expensed $9.9 million and $38.3 million of legal, accounting, and other direct costs related to this proposed Merger in "Other operating expenses (income) - net" in the Condensed Consolidated Statements of Operations, respectively.
On April 2, 2025, Getty Images and Shutterstock announced that they had each received a Request for Additional Information and Documentary Material ("Second Request") from the U.S. Department of Justice (the "DOJ") in connection with the transaction. The Second Request was issued under notification requirements of the HSR Act. The effect of the Second Request is to extend the waiting period imposed by the HSR Act until 30 days after Getty Images and Shutterstock have substantially complied with the request, unless that period is extended voluntarily by the parties or terminated sooner by the DOJ.
On June 10, 2025, Shutterstock held a Special Meeting of Stockholders (the "Special Meeting") in connection with the proposed merger with Getty Images. At the Special Meeting, Shutterstock's stockholders approved the proposal to adopt the Merger Agreement.
On September 18, 2025, Shutterstock irrevocably waived the condition set forth in the Merger Agreement with respect to the Company having amended or otherwise refinanced its 2019 Term Loans and 2019 Senior Unsecured Notes to extend the maturity of each to no earlier than February 19, 2028.
On October 20, 2025, the Company received notice that the CMA intends to refer the proposed Merger to a Phase 2 review process unless acceptable undertakings to address their competition concerns are offered. On November 3, 2025, the Company received notice that the CMA has referred the Merger to a Phase 2 review process. The Company remains committed to the proposed merger and will continue to engage with CMA and work with Shutterstock to expeditiously secure the necessary clearances.
Refinancing Amendment
On February 21, 2025 (the "Amended Effective Date"), the Company entered into the Second Incremental Commitment Amendment and Third Amendment to Credit Agreement (the "Refinancing Amendment"), which amended the Existing Credit Agreement. The Refinancing Amendment provided for a new tranche of senior secured fixed rate incremental term loans denominated in U.S. dollars in an aggregate principal amount of $580.0 million (the "2025 USD Term Loans") and a new tranche of senior secured term loans denominated in Euros in an aggregate principal amount of €440.0 million (the "2025 EUR Term Loans" and together with the 2025 USD Term Loans, the "2025 Term Loans").
The proceeds of the 2025 Term Loans were used to refinance in full all outstanding term loans under the existing credit agreement, and will mature on February 21, 2030. See "Note 7 - Debt" for additional discussion on our debt refinancing.
The proceeds from the 2025 Terms Loans were used to retire and repay the following debts:
•2019 USD Term Loans, with a $579.2 million principal amount as of the Amendment Effective Date, and
•2019 EUR Term Loans, with a €419 million principal amount as of the Amendment Effective Date
Permitted Debt Exchange Offering
The Company exercised its option to exchange its 2025 USD Term Loans, on a dollar-for-dollar basis, up to an aggregate principal amount of $580.0 million, pursuant to the Refinance Agreement, for newly issued 11.250% 11.250% Senior Secured Notes due 2030 (the "11.250% Senior Secured Notes"). The Company issued 11.250% Senior Secured Notes in an aggregate principal amount of $539.9 million, pursuant to an Indenture, dated as of May 5, 2025 (the "Indenture").
Subsequent Financing Activities
On October 21, 2025, the Company exchanged $294.7 million of its $300 million aggregate principal amount of 2019 Senior Unsecured Notes for newly issued 14.000% Senior Unsecured Notes due 2028 (the "2025 Senior Unsecured Notes") and obtained related consents to amend the indenture governing the 2019 Senior Unsecured Notes (the "Exchange Offer").
Additionally, the Company closed the offering of, $628.4 million aggregate principal amount of 10.500% Senior Secured Notes due 2030 (the "10.500% Senior Secured Notes"). The Company intends to use the proceeds to facilitate the proposed Merger with Shutterstock, primarily to fund the cash portion of the merger consideration and settle Shutterstock's outstanding debt. The 10.500% Senior Secured Notes mature on November 15, 2030, unless earlier redeemed or repurchased. In the event that the Merger Agreement is terminated on or prior to October 6, 2026, the 10.500% Senior Secured Notes will be redeemed at a redemption price equal to 100% of the issue price plus accrued and unpaid interest.
Business Overview
Getty Images is a preeminent global visual content creator and marketplace, providing a diverse collection of high-quality photos, illustrations, videos, and music licensing to businesses, media organizations, and individuals worldwide. The Company is one of the largest and most respected providers of stock imagery and multimedia content.
For over 30 years, Getty Images has embraced innovation, from analog to digital, from offline to e-commerce, from stills to video, from single image purchasing to subscriptions, from websites to application programming interfaces ("APIs"), from pre-shot content to AI generated content designed to be commercially safe. With quality content at the core of our offerings, we embrace innovation as a means to service our existing customers better and to reach new ones.
We offer comprehensive content solutions, including a la carte ("ALC") and subscription access to our pre- shot content and coverage, generative AI-services, custom content and coverage solutions, digital asset management tools, data insights, research, and print offerings.
Through our content and coverage, Getty Images moves the world-whether the goal is commercial or philanthropic, revenue-generating or society-changing, market-disrupting or headline-driving. Through our staff, our
exclusive contributors and partners, and our expertise, data, and research, Getty Images' content grabs attention, sheds light, represents communities, and reminds us of our history.
Through Getty Images, iStock, and Unsplash, we offer a full range of content solutions to meet the needs of any customer-no matter their size-around the globe, with almost 635 million visual assets available through its industry-leading sites. New content and coverage are added daily, with over 11 million new assets added each quarter and over 2.7 billion searches annually. The Company has over 700,000 purchasing customers, with customers from almost every country in the world with websites in 23 languages bringing the world's best content to media outlets, advertising agencies, and corporations of all sizes and, increasingly, serving individual creators and prosumers.
In support of its content, Getty Images employs over 115 staff photographers and videographers and distributes the content of almost 600,000 contributors and almost 360 premium content partners. Over 82,000 of our contributors are exclusive to the Company, creating content that cannot be found anywhere else. Each year, we cover more than 160,000 global events across news, sport, and entertainment, providing a depth and breadth of coverage that is unmatched. Getty Images also maintains one of the largest and best privately-owned photographic archives in the world, with over 150 million images across geographies, periods, and verticals.
We distribute content and services offerings through three primary product lines:
Creative
Creative is comprised of royalty-free ("RF") photos, illustrations, vectors, videos, and generative AI-services that are released for commercial use and cover a wide variety of commercial, conceptual, and contemporary subjects, including lifestyle, business, science, health, wellness, beauty, sports, transportation and travel. This content is available for immediate use by a wide range of customers with depth, breadth, and quality, allowing our customers to produce impactful websites, digital media, social media, marketing campaigns, corporate collateral, textbooks, movies, television, and online video content relevant to their target geographies and audiences. We primarily source Creative content from a broad network of professional, semi-professional, and amateur creators, many exclusive to Getty Images. We have a global creative insights team dedicated to providing briefing and art direction to our exclusive contributor community. Creative represents 58.4% and 59.3% of our revenue, of which 59.5% and 55.5%is generated through our annual subscription products for the nine months ended September 30, 2025, and 2024, respectively. Annual Subscription products include products and subscriptions for 12 months or longer, Unsplash API, and Custom Content.
Editorial
Editorial is comprised of photos and videos covering the world of entertainment, sports, and news. We combine contemporary coverage of events around the globe with one of the largest privately held archives globally, with access to images from the beginning of photography. We invest in a dedicated editorial team that includes over 115 staff photographers and videographers to generate our own coverage in addition to coverage from our network of content partners. Editorial represents 37.2% and 37.0% of our revenue, of which 55.4% and 52.5% is generated through our annual subscription products for the nine months ended September 30, 2025, and 2024, respectively. Annual Subscription products include subscriptions with a duration of 12 months or longer.
Other
Other represents 4.4% and 3.7% of our revenue for the nine months ended September 30, 2025 and 2024, respectively. This includes data access and/or licensing, music licensing, digital asset management, distribution services and print sales.
We service a full range of customers through our industry-leading brands and websites:
Getty Images
Gettyimages.com offers premium creative content and editorial coverage, including video, with exclusive content, and customizable rights and protections. This site primarily serves more prominent enterprise agency, media, and corporate customers with global customer support from our sales and service teams. Customers can purchase on an ALC basis or through our content subscriptions, including our "Premium Access" subscription, where we uniquely offer frictionless access across all of the Getty Images and iStock content in one solution.
iStock
iStock.com is our budget-conscious e-commerce offering providing our customers access to creative stills and video, including exclusive content. This site primarily serves small and medium-sized businesses, including the growing freelance market. Customers can purchase on an ALC basis or through a range of monthly and annual subscription options with access to an extensive amount of unique and exclusive content.
Unsplash
Unsplash.com is a platform offering free stock photo downloads and paid subscriptions targeted to the high-growth prosumer and semi-professional creator segments. The Unsplash website reaches a significant and geographically diverse audience with more than 87 millionimage downloads every month.
In addition to our websites, customers and partners can access and integrate our content, metadata and search capabilities via our APIs and through a range of mobile apps and plugins.
We are a critical intermediary between content suppliers and a broad set of customers. We compete against a broad range of stock licensing marketplaces, editorial news agencies, creative agencies, production companies, staff and freelance photographers and videographers, photo and video archives, freelance marketplaces and amateur content creators, creative tools and services and free sources. Getty Images' unique offering and approach offers a strong value proposition to our customers and content contributors.
For customers:
•We offer a comprehensive suite of high quality, authentic content, purchase and licensing options and services to meet the needs of our customers, regardless of project requirements, needs or budgets.
•Our content sourcing and production, rights oversight, websites and content distribution are all supported by a unique, scalable cloud-based unified platform with powerful artificial intelligence/machine learning and data addressing all customers at scale.
•Customers have access to Generative AI by Getty Images and iStock which is designed to be a commercially-safe and responsible solution designed to help embrace AI, elevate creativity, and ideate or iterate on concepts and compositions.
•Customers can avoid the costly investment and environmental impact of producing content on their own. This can include costs incurred from staffing, travel and access, model and location, hardware and production, and editing.
•Customers do not have to wait for content to be produced and distributed and can avoid the difficulties and pitfalls of searching across the internet to locate and negotiate for rights to license or use specific content. Our best-in-class, scaled infrastructure offers customers a one-stop shop for instant content access and maneuverability.
•Customers licensing from Getty Images and iStock receive trusted copyright claim protections, model and property releases and the ability to secure the necessary clearances for their intended use of the content.
For content contributors:
•Access to a marketplace that reaches almost every country in the world, across all customer categories and sizes and generated annual royalties of nearly $220 million for the trailing twelve months ending September 30, 2025.
•We maintain a dedicated and experienced creative insights team focused on understanding changes in customer demand, the visual landscape, the authentic portrayal of communities and cultures, and the evolution of core creative concepts. We work closely with leading organizations to augment our proprietary research and understanding of communities and cultures to provide content with authentic depiction. We convey this research to our exclusive contributors via actionable insights allowing them to invest in and create content that accurately caters to changing consumer demand and up to date market trends.
•Not only do we provide exclusive contributors with scaled access to end markets and proprietary information, but we also provide premium royalty rates. This allows our exclusive contributors and partners to confidently invest more into their productions with the potential to generate higher returns.
•Partnering with Getty Images allows contributors to focus on content creation and avoid time and financial investment in the marketing, sales, distribution and management of their content.
•Our Generative AI by Getty Images and iStock products compensates our world-class content creators for the use of their work in our AI models, allowing them to continue to create more high-quality pre-shot imagery.
Macroeconomic Conditions
The broader implications of the macroeconomic environment, including uncertainty around recent international armed conflicts in the Ukraine and the Middle East, geopolitical tensions, lingering supply chain shortages, tariffs, inflationary and interest rate pressures, and other related global economic conditions, remain unknown. A deterioration in macroeconomic conditions could continue to increase the risk of lower consumer spending, foreign currency exchange fluctuations, or other business interruptions, which may adversely impact our business and financial results.
Components of Operating Results
Revenue
We generate revenue by licensing content to customers through multiple license models and purchase options, as well as by providing related services to our customers. The key image licensing model in the pre-shot market is RF. Content licensed on a RF basis is subject to a standard set of terms, allowing the customer to use the image for an unlimited duration and without limitation on the use or application. Within our video offering, we also offer a licensing model known as Rights-Ready. The Rights-Ready model offers a limited selection of broader usage categories, thus simplifying the purchase process. In September 2023 and January 2024, we launched Generative AI by Getty Images and Generative AI by iStock, respectively. They are generative AI text to image and image to image tools that were trained on Getty Images' world-class creative content and designed for commercial use. Customers that download visuals through the tool will receive the standard RF license.
In addition to licensing imagery and video, we generate revenue from data access and/or licensing, custom content solutions, photo and video assignments, music content in some of our subscriptions, print sales and licensing our digital asset management systems to help customers manage their owned and licensed digital content.
A significant portion of the business has transitioned to an annual subscription model with strong revenue retention characteristics. Annual subscriptions now comprise approximately 56% of total revenue for the nine months ended September 30, 2025, and we continue to focus on growing subscription revenue.
References to "reported revenue" in this discussion and analysis are to our revenue as reported in our historical condensed consolidated financial statements for the relevant periods and reflect the effect of changes in foreign currency exchange rates. References to "currency neutral" ("Currency Neutral" or "CN") revenue growth or decline (expressed as a percentage) in this section refer to our revenue growth or decline (expressed as a percentage), excluding the effect of changes in foreign currency exchange rates. See "Non-GAAP Financial Measures" for additional information regarding Currency Neutral revenue growth or decline (expressed as a percentage).
Cost of revenue (exclusive of depreciation and amortization)
The ownership rights to the majority of the content we license are retained by the owners, and licensing rights are provided to us by a large network of content contributors and content partners. When we license content entrusted to us by content suppliers, we pay royalties to them at varying rates depending on the license model and the use of that content that our customers select. Suppliers who choose to work with us under contract typically receive royalties of 20% to 50% of the total license fee we charge customers, depending on the basis on which their content is licensed by our customers. Contributors are compensated for any inclusion of their content in AI data training sets and may share in the revenue generated by AI tools and services trained with their content. We also own the copyright to certain content in our collections ("wholly-owned content"), including content produced by our staff photographers for our editorial product, for which we do not pay any third-party royalties. Cost of revenue includes certain costs of our assignment photo shoots, but excludes amortization associated with creating or buying content. Cost of revenue consists primarily of royalties owed to content contributors, comprised of photographers, filmmakers, third-party companies that license their collection of content through us ("Content Partners") and our third-party music content provider.
Going forward, we expect the cost of revenue to trend higher in absolute dollars as we continue growing our revenue. We expect our cost of revenue as a percentage of revenue to vary modestly based on changes in revenue mix by product, as royalty rates vary depending on license model and use of content.
Selling, general, and administrative expenses
Selling, general, and administrative expenses ("SG&A") primarily consist of staff costs, marketing expenses, occupancy costs, professional fees and other general operating charges.
We expect our selling, general and administrative expenses to increase in absolute dollars but remain relatively constant as a percentage of revenue in the near term. Absolute dollar spending will increase as certain costs increase and we continue to expand our operations and invest in our growth. Lastly, we expect our marketing to stay relatively constant as a percentage of revenue. However, the Company will continue to evaluate opportunities to incrementally invest in marketing as appropriate.
Depreciation
Depreciation expense consists of internally developed software, content and equipment depreciation. We record property and equipment at cost and reflect Balance Sheet balances net of accumulated depreciation. We record depreciation expense on a straight-line basis. We depreciate leasehold improvements over the shorter of the respective lives of the leases or the useful lives of the improvements. We expect depreciation expense to remain stable as we continue to innovate and invest in the design, user experience and performance of our websites.
Amortization
Amortization expense consists of the amortization of intangible assets related to acquired customer relationships, trademarks and other intangible assets. The majority of our intangible assets have been fully amortized. We expect amortization expense to be insignificant in the coming years.
Factors affecting results of operations
A shift in the product mix of our revenue may affect our overall cost of revenue as a percentage of revenue. Our revenues and profitability are also subject to fluctuations in foreign exchange rates. The weakening or strengthening of our reporting currency, the U.S. Dollar, during any given period as compared to currencies that we collect revenues in, most notably, the Euro and British pound, impacts our reported revenues.
Our future financial condition and results of operation will also be dependent upon various factors that generally affect the digital content industry, including the general trends affecting the media, marketing and advertising customer bases that we target, protection of intellectual property, and new and expanding technology such as generative AI technologies. In addition, our financial condition and results of operation will continue to be affected by factors that affect internet commerce companies and by general deterioration in macroeconomic factors that could continue to increase the risks of lower consumer spending, other business interruptions, the global and economic uncertainty caused by, among other things, any lingering effects of the Hollywood actors and writers strike, the military conflicts between Russia and Ukraine and in the Middle East, tariffs or trade restrictions imposed by the U.S. and other countries, changes in political climate, and high interest rates, currency fluctuations, high inflation and labor shortages.
Impact of Currency Fluctuations
Assets and liabilities for subsidiaries with functional currencies other than the U.S. dollar are recorded in foreign currencies and translated at the exchange rate on the Balance Sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the period. Translation adjustments resulting from this process are charged or credited to "Other comprehensive income (loss)", as a separate component of stockholder's equity. The Company recognized net foreign currency translation adjustment gains of $64.6 million during the nine months ended September 30, 2025 and net foreign currency translation adjustmentgains of $7.5 million during the nine months ended September 30, 2024.
Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in "Foreign exchange gain (loss) - net" in the Condensed Consolidated Statements of Operations. For the nine months ended September 30, 2025, the Company recognized net foreign currency transaction losses of $78.4 million. For the nine months ended September 30, 2024, the Company recognized net foreign currency transaction losses of $9.8 million.
Results of Operations
The following table sets forth our operating results for the periods indicated.
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Three Months Ended September 30, |
increase (decrease) |
Nine Months Ended September 30, |
increase (decrease)
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| (In thousands, except percentages) | 2025 | 2024 | $ change |
% change
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2025 | 2024 | $ change |
% change
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| Revenue | $ | 240,044 | $ | 240,545 | $ | (501) | (0.2) | % | $ | 699,003 | $ | 691,963 | $ | 7,040 | 1.0 | % | ||||||||||||||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | 64,294 | 64,092 | 202 | 0.3 | % | 190,132 | 187,445 | 2,687 | 1.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 101,044 | 100,130 | 914 | 0.9 | % | 304,378 | 302,306 | 2,072 | 0.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation | 15,970 | 14,879 | 1,091 | 7.3 | % | 46,452 | 43,928 | 2,524 | 5.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Amortization | 588 | 590 | (2) | (0.3) | % | 1,727 | 1,716 | 11 | 0.6 | % | ||||||||||||||||||||||||||||||||||||||||
| Loss on litigation | 2,614 | 3,199 | (585) | (18.3) | % | 8,964 | 8,013 | 951 | 11.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Other operating expenses - net | 10,420 | 219 | 10,201 | 4658.0 | % | 39,334 | 3,627 | 35,707 | 984.5 | % | ||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 194,930 | 183,109 | 11,821 | 6.5 | % | 590,987 | 547,035 | 43,952 | 8.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Income from operations | 45,114 | 57,436 | (12,322) | (21.5) | % | 108,016 | 144,928 | (36,912) | (25.5) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | (35,746) | (34,004) | (1,742) | 5.1 | % | (104,977) | (100,618) | (4,359) | 4.3 | % | ||||||||||||||||||||||||||||||||||||||||
| (Loss) on fair value adjustment for swaps - net | - | - | - | NM | - | (1,459) | 1,459 | (100.0) | % | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange gain (loss) - net | 1,492 | (28,657) | 30,149 | (105.2) | % | (78,357) | (9,796) | (68,561) | 699.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | - | - | - | NM | (5,474) | - | (5,474) | NM | ||||||||||||||||||||||||||||||||||||||||||
| Other non-operating income (expense) - net | 701 | 1,452 | (751) | (51.7) | % | (3,328) | 4,147 | (7,475) | (180.3) | % | ||||||||||||||||||||||||||||||||||||||||
| Total other expense - net | (33,553) | (61,209) | 27,656 | (45.2) | % | (192,136) | (107,726) | (84,410) | 78.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | 11,561 | (3,773) | 15,334 | (406.4) | % | (84,120) | 37,202 | (121,322) | (326.1) | % | ||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | 10,057 | 1,246 | 8,811 | 707.1 | % | (31,193) | (22,453) | (8,740) | 38.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 21,618 | $ | (2,527) | $ | 24,145 | (955.5) | % | $ | (115,313) | $ | 14,749 | $ | (130,062) | (881.8) | % | ||||||||||||||||||||||||||||||||||
________________________
NM - Not meaningful
Comparison of the Three Months Ended September 30, 2025 and 2024
Revenue by product
| (In thousands, except percentages) | Three Months Ended September 30, |
increase / (decrease)
|
||||||||||||||||||||||||||||||||||||||||||
| 2025 | % of revenue | 2024 | % of revenue | $ change | % change |
CN % change
|
||||||||||||||||||||||||||||||||||||||
| Creative | 144,892 | 60.4 | % | 133,713 | 55.6 | % | 11,180 | 8.4 | % | 6.4 | % | |||||||||||||||||||||||||||||||||
| Editorial | 89,315 | 37.2 | % | 92,781 | 38.6 | % | (3,466) | (3.7) | % | (5.6) | % | |||||||||||||||||||||||||||||||||
| Other | 5,837 | 2.4 | % | 14,051 | 5.8 | % | (8,214) | (58.5) | % | (58.8) | % | |||||||||||||||||||||||||||||||||
| Total revenue | $ | 240,044 | 100.0 | % | $ | 240,545 | 100.0 | % | $ | (501) | (0.2) | % | (2.0) | % | ||||||||||||||||||||||||||||||
For the three months ended September 30, 2025, total revenue on a reported basis was $240.0 million as compared to $240.5 million for the three months ended September 30, 2024. On a reported basis, revenue decreased by 0.2% (2.0% CN) for the three months ended September 30, 2025. Foreign exchange movements positively impacted reported revenue growth for the three months ended September 30, 2025 by 180 basis points, largely driven by the weakening dollar relative to the EUR and GBP.
Creativerevenue increased on a reported basis 8.4% (6.4% CN) to $144.9 million for the three months ended September 30, 2025, compared to $133.7 million for the three months ended September 30, 2024. The increase of $11.2 million for the three months ended September 30, 2025 was driven by our Premium Access subscriptions (increased $10.4 million), which included a multi-year agreement signed in the third quarter that had significant upfront revenue recognition. Additionally, subscriber download patterns in the prior year period, with major events during the three months ended September 30, 2024, skewed allocation of revenue more toward Editorial than Creative. No comparable events of this magnitude occurred during the three months ended September 30, 2025, resulting in download trends returning to historical levels.
Editorialrevenue decreased on a reported basis by $3.5 million, or 3.7%, to $89.3 million, and 5.6% on a currency-neutral basis. The decrease was driven by Editorial ALC (decreased $5.2 million), partially offset by an increase in Editorial subscriptions (increased $2.1 million). Overall, the product decrease was driven by declines in Sport, due to the quadrennial UEFA European
Championship soccer tournament and the Paris Olympics coverage that occurred in the prior year period; and News, driven by the U.S. political spend in the prior year period.
Other revenue decreased on a reported basis by $8.2 million, or 58.5%, to $5.8 million for the three months ended September 30, 2025, compared to $14.1 million for the three months ended September 30, 2024. On a currency-neutral basis, other revenue decreased 58.8% compared to the same period in 2024. The decrease was driven by data access and/or licensing revenue (decreased $8.2 million), tied to an expanded 5-year Creative content deal with an existing customer that was signed in the prior year period, which was largely recognized upfront.
Revenue Recognition
The timing of our revenue recognition can be influenced by several factors, including the nature of the contract with the customer, and the Company's estimates regarding unused content and customer download patterns and whether we have met our obligation to our customer. These factors can lead to variability in the timing and amount of revenue recognized in a given period.
Cost of revenue (exclusive of depreciation and amortization)
Cost of revenue for the three months ended September 30, 2025 was $64.3 million compared to $64.1 millionin the same prior year period. As a percentage of total revenue, cost of revenue was 26.8% and 26.6% for the three months ended September 30, 2025 and September 30, 2024, respectively. Any changes in cost of revenue as a percentage of revenue compared to a prior period is due primarily to revenue mix by product. Generally, cost of revenue rates vary modestly period over period based on changes in revenue mix by product, as royalty rates vary depending on the license model and use of content.
Selling, general, and administrative expense
Reported SG&A increased by $0.9 million or 0.9% (decreased 0.5% CN) for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. SG&A increases from the prior period were driven by $2.9 million in professional fees, primarily related to higher audit related fees due to our public company requirements. These increases were partially offset by decreases in staff costs ($0.5 million), travel and entertainment ($0.4 million), telecommunications ($0.3 million) and human resources related costs ($0.2 million).
Depreciation expense
Depreciation expense was $16.0 million for the three months ended September 30, 2025, an increase of $1.1 millionor 7.3% compared to $14.9 millionfor the three months ended September 30, 2024. The increase is due to capital investments made that are primarily related to internally software development as we continue to innovate and invest in the design, user experience and performance of our websites.
Amortization expense
For the three months ended September 30, 2025, amortization expense was $0.6 million, which was flat compared to $0.6 million for the three months ended September 30, 2024.
Loss on litigation
For the three months ended September 30, 2025, the Company recognized loss on litigation of $2.6 million comparedto $3.2 million for the three months ended September 30, 2024. The loss on litigation consists of the interest on the summary judgment, legal fees, and amortization of fees related to appeal bond. The Company will continue to see these expenses as we navigate through the appeal of the judgment in the actions in the Initial and Follow on Warrant Litigation, and incur legal fees related to the additional warrant cases. See "Note 12 - Legal Proceedings and Contingencies" for additional discussion.
Other operating expenses - net
Other operating expenses - net was $10.4 million for the three months ended September 30, 2025, compared to $0.2 million in the three months ended September 30, 2024. This increase isprimarily driven by costs incurred in connection with our proposed merger with Shutterstock and expect these costs to continue as we proceed through the regulatory process. Other operating expenses will continue to fluctuate from period to period as this line item is heavily influenced by non-recurring events such as mergers and acquisitions, claims, settlements, and gains/losses on asset disposals.
Interest expense
We recognized interest expense of $35.7 million and $34.0 million for the three months period ended September 30, 2025 and September 30, 2024, respectively. Our interest expense primarily consists of interest charges on our debt and revolving credit facility which remains undrawn, as well as the amortization of original issue discount and debt issuance costs. See "Note 7 - Debt" for additional discussions on our debt.
Foreign exchange gain (loss) - net
We recognized foreign exchangegain, net of $1.5 million for the three months ended September 30, 2025, compared to net losses of $28.7 million for the three months ended September 30, 2024. The change for the three months ended September 30, 2024 was primarily driven by fluctuations in the EUR related to our 2019 EUR Term Loans, which resulted in a foreign currency loss of $19.2 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, fluctuations in currencies relative to the dollar during the quarter had an immaterial impact.
We expect continued volatility in foreign exchange gains and losses each quarter based on fluctuations in exchange rates impacting our foreign currency exposures.
Other non-operating income (expense) - net
We recognized $0.7 million of othernon-operating income, net for the three months ended September 30, 2025 compared to $1.5 million of other non-operating income for the three months September 30, 2024. The change of $0.8 million was primarily due to lower interest income, driven by a decrease in U.S. interest rates.
Income taxes
The Company's income tax provision is computed using an estimated annual effective tax rate, adjusted for discrete items. The estimated annual effective tax rate is subject to significant volatility due to several factors, including changes in the forecasted pre-tax income (loss) and income tax (expense) benefit, realizability of deferred tax assets, intercompany transactions, foreign currency gain (loss), mergers and acquisitions, jurisdictional footprints, and changes in the Company's business operations. In addition, the effective tax rate's volatility depends on the amount of pre-tax income (loss). For example, the impact of non-taxable, non-deductible, and discrete items on the effective tax rate is greater when the pre-tax income (loss) is smaller.
The Company recorded an income tax benefit of $10.1 million and $1.2 million for the three months ended September 30, 2025 and September 30, 2024, respectively. For 2025, the Company's effective tax rate is expected to be a large negative percentage due to the Company's pre-tax loss and income tax expense items that are not analogous to pre-tax loss, such as foreign withholding taxes, non-deductible interest expense, and change in valuation allowance. The effective tax rate may vary significantly throughout the year depending on the changes in the pre-tax income (loss).
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes various tax provisions, such as extending and modifying certain Tax Cuts and Jobs Act provisions and the international tax framework. The Company expects these changes to reduce our annual U.S. tax liability by approximately $4.0 million to $7.0 million in 2025. The Company continues to evaluate the impact of the OBBBA on its consolidated financial statements.
Comparison of the Nine Months Ended September 30, 2025 and 2024
Revenue by product
| (In thousands, except percentages) | Nine Months Ended September 30, |
increase / (decrease)
|
||||||||||||||||||||||||||||||||||||||||||
| 2025 | % of revenue | 2024 | % of revenue | $ change | % change |
CN % change
|
||||||||||||||||||||||||||||||||||||||
| Creative | 407,891 | 58.4 | % | 410,451 | 59.3 | % | (2,561) | (0.6) | % | (0.9) | % | |||||||||||||||||||||||||||||||||
| Editorial | 260,274 | 37.2 | % | 255,830 | 37.0 | % | 4,444 | 1.7 | % | 1.2 | % | |||||||||||||||||||||||||||||||||
| Other | 30,838 | 4.4 | % | 25,682 | 3.7 | % | 5,156 | 20.1 | % | 19.8 | % | |||||||||||||||||||||||||||||||||
| Total revenue | $ | 699,003 | 100.0 | % | $ | 691,963 | 100.0 | % | $ | 7,040 | 1.0 | % | 0.7 | % | ||||||||||||||||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current year presentation.
For the nine months ended September 30, 2025, total revenue on a reported basis was $699.0 million as compared to $692.0 million for the nine months ended September 30, 2024. On a reported basis, revenue increased by 1.0% (0.7% CN) for the nine months ended September 30, 2025. Foreign exchange movements positively impacted reported revenue growth for the nine
months ended September 30, 2025 by 30 basis points, largely driven by the weakening dollar relative to the EUR and GBP.
Creativerevenue decreased on a reported basis 0.6% (0.9% CN) to $407.9 million for the nine months ended September 30, 2025, compared to $410.5 million for the nine months ended September 30, 2024. The decrease of $2.6 million for the nine months ended September 30, 2025 was driven by declines in our ALC credit sales and ultra packs, ALC Premium RF stills and video and iStock monthly subscriptions (decreased $13.3 million in the aggregate). The declines were largely driven by reduced revenue from Agency customers, which are accounted for entirely within Creative revenue and purchase mainly on an ALC basis. Declines were also seen from our Unsplash assignments and advertising business (decreased $4.2 million) largely driven by a one-time project in the prior year period that did not recur during the current year period. Additionally, we saw offsetting increases in Creative subscriptions (increased $14.8 million).
Editorialrevenue increased on a reported basis by $4.4 million, or 1.7%, to $260.3 million, and 1.2% on a currency-neutral basis. The increase was driven by Editorial subscriptions (increased $10.0 million) and assignments (increased $1.7 million), offset by Editorial ALC (decreased $7.2 million). Overall, these product increases were driven by growth in Sport, News and Archive, offset by a decrease in Entertainment.
Other revenue increased on a reported basis by $5.2 million, or 20.1%, to $30.8 million for the nine months ended September 30, 2025, compared to $25.7 million for the nine months ended September 30, 2024. On a currency-neutral basis, other revenue increased 19.8% compared to the same period in 2024. The increase was primarily driven by new data access and licensing agreements.
Revenue Recognition
The timing of our revenue recognition can be influenced by several factors, including the nature of the contract with the customer, and the Company's estimates regarding unused content and customer download patterns and whether we have met our obligation to our customer. These factors can lead to variability in the timing and amount of revenue recognized in a given period.
Cost of revenue (exclusive of depreciation and amortization)
Cost of revenue for the ninemonths ended September 30, 2025 was $190.1 million compared to $187.4 millionin the same prior year period. As a percentage of total revenue, cost of revenue was 27.2%and 27.1%for the ninemonths ended September 30, 2025 and September 30, 2024, respectively. Any changes in cost of revenue as a percentage of revenue compared to a prior period is due primarily to revenue mix by product. Generally, cost of revenue rates vary modestly period over period based on changes in revenue mix by product, as royalty rates vary depending on the license model and use of content.
Selling, general, and administrative expense
Reported SG&A expense increased by $2.1 million or 0.7% (0.6% CN) for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. SG&A fluctuations from the prior period include the following:
•increase of $10.9 million related to professional fees for the nine months ended September 30, 2025, primarily related to legal fees incurred for our ongoing AI litigation cases and higher audit related fees due to our public company requirements.
•decrease of $7.5 million related to staff costs for the nine months ended September 30, 2025. The decrease was primarily driven by lower equity-based compensation (decreased $5.1 million).
Depreciation expense
Depreciation expense was $46.5 million for the ninemonths ended September 30, 2025,an increase of$2.5 million or 5.7% compared to $43.9 million for the ninemonths ended September 30, 2024. The increase is due to capital investments made that are primarily related to internally software development as we continue to innovate and invest in the design, user experience and performance of our websites.
Amortization expense
For the ninemonths ended September 30, 2025, amortization expense was $1.7 million, which was flat compared to $1.7 million for the ninemonths ended September 30, 2024.
Loss on litigation
For the ninemonths ended September 30, 2025, the Company recognized loss on litigation of $9.0 millioncomparedto $8.0 million for the ninemonths ended September 30, 2024. The loss on litigation consists of the interest on the summary judgment, legal fees, and amortization of fees related to appeal bond. The Company will continue to see these expenses as we navigate through the appeal of the judgment in the actions in the Initial and Follow on Warrant Litigation, and incur legal fees related to the additional warrant cases. See "Note 12 - Legal Proceedings and Contingencies" for additional discussion.
Other operating expenses - net
Other operating expenses - net was $39.3 million for the nine months ended September 30, 2025, compared to $3.6 million for the nine months ended September 30, 2024. This increase is primarily driven by costs incurred in connection with our proposed merger with Shutterstock and expect these costs to continue as we proceed through the regulatory process. Other operating expenses will continue to fluctuate from period to period as this line item is heavily influenced by non-recurring events such as mergers and acquisitions, claims, settlements, and gains/losses on asset disposals.
Interest expense
We recognized interest expense of $105.0 million and $100.6 million for the ninemonths period ended September 30, 2025 and September 30, 2024, respectively. Our interest expense primarily consists of interest charges on our debt and revolving credit facility which remains undrawn, as well as the amortization of original issue discount, debt issuance costs and amortization of deferred debt financing fees. See "Note 7 - Debt" for additional discussions on our debt.
(Loss) on fair value adjustment for swaps - net
We previously held positions in interest rate swaps, which expired in February 2024, and recognized net losses of $1.5 million during the ninemonths ended September 30, 2024. These losses were driven by changes in interest rates relative to the rates in our derivatives. There was no such loss for the ninemonths ended September 30, 2025.
While we have experienced volatility in the fair value adjustments on our expired derivative instruments, we believe hedging allowed us to reduce our exposure to interest rate and foreign currency risks. We will continue to evaluate opportunities to utilize swaps, forwards, and other instruments to mitigate financial risks associated with our business.
Foreign exchange gain (loss) - net
We recognized foreign exchange losses, net of $78.4 million for the nine months ended September 30, 2025, compared to net losses of $9.8 million for the nine months ended September 30, 2024. These changes are primarily driven by fluctuations in the EUR related to our 2019 EUR Term Loans and 2025 EUR Term Loans, which resulted in a foreign currency loss of $56.9 million for the nine months ended September 30, 2025 and a foreign currency loss of $4.0 million for the nine months ended September 30, 2024.
We expect continued volatility in foreign exchange gains and losses each quarter based on fluctuations in exchange rates impacting our foreign currency exposures.
Loss on extinguishment of debt
We recognized loss on extinguishment of debt of$5.5 million for the ninemonths ended September 30, 2025 from the extinguishment of our 2019 Term Loans. See "Note 7 - Debt" for additional discussion on the refinancing of our 2019 Term Loans.
Other non-operating income (expense) - net
We recognized $3.3 million of other non-operating expense, net for the nine months ended September 30, 2025 compared to $4.1 million of other non-operating income, net for the nine months September 30, 2024. The change of $7.5 million was primarily due to costs related to the recent debt refinance, debt exchange and lower interest income, driven by a decrease in U.S. interest rates.
Income taxes
The Company's income tax provision is computed using an estimated annual effective tax rate, adjusted for discrete items. The estimated annual effective tax rate is subject to significant volatility due to several factors, including changes in the forecasted
pre-tax income (loss) and income tax (expense) benefit, realizability of deferred tax assets, intercompany transactions, foreign currency gain (loss), mergers and acquisitions, jurisdictional footprints, and changes in the Company's business operations. In addition, the effective tax rate's volatility depends on the amount of pre-tax income (loss). For example, the impact of non-taxable, non-deductible, and discrete items on the effective tax rate is greater when the pre-tax income (loss) is smaller.
The Company recorded an income tax expense of $31.2 million and $22.5 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. For 2025, the Company's effective tax rate is expected to be a large negative percentage due to the Company's pre-tax loss and income tax expense items that are not analogous to pre-tax loss, such as foreign withholding taxes, non-deductible interest expense, and change in valuation allowance. The effective tax rate may vary significantly throughout the year depending on the changes in the pre-tax income (loss).
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes various tax provisions, such as extending and modifying certain Tax Cuts and Jobs Act provisions and the international tax framework. The Company expects these changes to reduce our annual U.S. tax liability by approximately $4.0 to $7.0 million in 2025. The Company continues to evaluate the impact of the OBBBA on its consolidated financial statements.
Liquidity and Capital Resources
Our sources of liquidity are our existing cash and cash equivalents, cash provided by operations and amounts available under our revolving credit facility. As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $109.5 million and $121.2 million, respectively, and availability under our unused revolving credit facility, which expires May 4, 2028.
Our principal liquidity needs include debt service and capital expenditures, as well as those required to support working capital, internal growth, and strategic acquisitions and investments. Deferred revenue represents the majority of our current liabilities, which given its nature is not expected to require cash settlement.
We expect existing cash and cash equivalents, cash provided by operations, and financing activities to be adequate to fund our operating activities and cash required for investing and financing activities for at least the next 12 months and thereafter for the foreseeable future.
In February 2025, we amended our existing credit agreement, dated as of February 19, 2019. The amendment, among other things, provided for (i) a new tranche of senior secured fixed rate incremental term loans denominated in U.S. Dollars in an aggregate principal amount of $580.0 million and (ii) a new tranche of senior secured term loans denominated in Euros in an aggregate principal amount of €440.0 million. The proceeds of the 2025 Term Loans were used to refinance in full all outstanding 2019 Term Loans under the existing credit agreement, and will mature on February 21, 2030. See "Note 7 - Debt" for additional discussion on our debt refinancing.
In May 2025, the Company exercised its option to exchange its 2025 USD Term Loans, on a dollar-for-dollar basis, up to an aggregate principal amount of $580 million, pursuant to the Refinance Agreement, for newly issued 11.25% Senior Secured Notes due 2030 (the "11.250% Senior Secured Notes"). The Company issued 11.250% Senior Secured Notes in an aggregate principal amount of $539.9 million, pursuant to an Indenture, dated as of May 5, 2025 (the "Indenture").
On October 21, 2025, the Company exchanged $294.7 million of its $300 million aggregate principal amount of 2019 Senior Unsecured Notes for newly issued 14.000% Senior Unsecured Notes due 2028 (the "2025 Senior Unsecured Notes") and obtained related consents to amend the indenture governing the 2019 Senior Unsecured Notes (the "Exchange Offer"). Additionally, the Company closed the sale of $628.4 million aggregate principal amount of 10.500% Senior Secured Notes due 2030 (the "10.500% Senior Secured Notes"). The Company intends to use the proceeds for the proposed Merger with Shutterstock. The 10.500% Senior Secured Notes mature on November 15, 2030, unless earlier redeemed or repurchased. In the event that the Merger Agreement with Shutterstock is terminated or will not be consummated on or prior to October 6, 2026, the 10.500% Senior Secured Notes will be redeemed at a redemption price equal to 100% of the issue price plus accrued and unpaid interest.
In connection with 10.500% Senior Secured Notes, the Company also entered into an escrow agreement, dated as of October 21, 2025 (the "Escrow Agreement). Pursuant to the terms of the Escrow Agreement, the Issuer has deposited the gross proceeds of the offering of the 10.500% Senior Secured Notes in an escrow account. Upon release from escrow, the Company intends to use the escrowed proceeds to pay approximately $350.0 million of fees, expenses and cash consideration in connection with the Merger and to use the remaining proceeds to refinance certain indebtedness of Shutterstock and pay fees and expenses in connection with that offering.
We may also be subject to losses as a result of legal proceedings that may be in excess of amounts of insurance coverage available. In particular, we have insurance coverage of $60.0 million for losses in respect of the Initial Warrant Litigation, the Follow-on Warrant Litigation (each as defined in "Note 12 - Legal Proceedings and Contingencies") and any additional litigation that is filed based on related facts or circumstances, including legal fees and expenses.As of September 30, 2025, we had a remaining insurance recovery receivable related thereto of approximately $37.2 million, with related litigation reserves of $115.5 million. The Company has posted an appeal bond in respect of the Initial Warrant Litigation and, to date, no portion of the judgments entered in the Initial Warrant Litigation or the Follow-on Warrant Litigation, which are subject to appeal, has been paid. To the extent not reimbursed by insurance, we expect to fund any payments required for the resolution of pending legal proceedings with our sources of liquidity. See "Note 12 - Legal Proceedings and Contingencies" herein for additional discussions of the Initial Warrant Litigation and the Follow-On Warrant Litigation.
The Company has open tax audits in various jurisdictions and some of these jurisdictions require taxpayers to pay assessed taxes in advance or at the time of appealing such assessments. One such jurisdiction is Canada, where one of the
Company's subsidiaries, iStockphoto ULC, received tax assessments from the Canada Revenue Agency ("CRA") asserting additional tax is due. The position taken by the CRA is related to the transactions between iStockphoto ULC and other affiliates within the Getty Images group for the 2015 Canadian income tax return filed. The Company believes the CRA position lacks merit and is vigorously contesting these assessments through the appeal process, including engaging with the U.S. Competent Authority.
As part of the appeal process in Canada, the Company may be required to pay a portion of the assessment amount, which the Company estimates could be up to $19.0 million in 2025. Such required payment is not an admission that the Company believes it is subject to such taxes. The Company believes it is more likely than not it will prevail on appeal, however, if the CRA were to be successful in the appeal process, the Company estimates the maximum potential outcome could be up to $27.7 million.
Our cash flows are as follows:
|
Nine Months Ended September 30, |
increase (decrease) | |||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | $ change | % change | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 44,550 | $ | 78,624 | $ | (34,074) | (43.3) | % | ||||||||||||||||||
| Net cash used in investing activities | $ | (46,552) | $ | (57,361) | $ | 10,809 | 18.8 | % | ||||||||||||||||||
| Net cash used in financing activities | $ | (28,068) | $ | (53,866) | $ | 25,798 | 47.9 | % | ||||||||||||||||||
| Effects of exchange rate fluctuations | $ | 18,405 | $ | 6,141 | $ | 12,264 | NM | |||||||||||||||||||
________________________
NM - Not meaningful
Operating Activities
Cash provided by operating activities is primarily comprised of net income (loss), as adjusted for non-cash items, and changes in operating assets and liabilities. Non-cash adjustments consist primarily of depreciation and amortization, unrealized gains and losses on our foreign denominated debt, equity-based compensation and deferred income taxes.
Cash provided by operating activities is primarily comprised of net income (loss), as adjusted for non-cash items, and changes in operating assets and liabilities. Non-cash adjustments consist primarily of depreciation and amortization, unrealized gains and losses on our foreign denominated debt, equity-based compensation and deferred income taxes.
For the nine months ended September 30, 2025 cash provided by operating activities was $44.6 million, as compared to cash provided by operating activities of $78.6 million for the nine months ended September 30, 2024. The decrease in cash provided by operating activities was primarily driven by merger related costs, of which $33.2 million were paid in the nine months ended September 30, 2025. These costs were comprised mainly of professional services fees, including legal, advisory, accounting and tax fees. In addition, our cash provided by operating activities was impacted by changes in working capital, including reduced cash flows from the change in timing of collections of accounts receivable and the payments of accrued expenses, increased cash flows from the timing of payments for accounts payable and interest, and an increase in cash paid for taxes for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
Investing Activities
The changes in cash flows from investing activities relate to purchases of property and equipment and internal software development as part of our ongoing efforts to innovate in the design, user experience, and performance of our websites.
For the nine months ended September 30, 2025 and 2024, cash used in investing activities was $46.6 million and $57.4 million, respectively. The decrease in cash used for investing activities was related to the acquisition of Motorsport Images LLC and Motorsport.com, Inc. in the prior year period.
Financing Activities
For the nine months ended September 30, 2025, cash used in financing was $28.1 million, compared to $53.9 million for nine months ended September 30, 2024. Financing activities for the nine months ended September 30, 2025 included principal payments on our 2019 Term Loans and 2025 Term Loans, offset by proceeds from debt resulting from issuance of the 2025 Term Loans, debt issuance costs, and proceeds from common stock issuance.
Key Performance Indicators and Non-GAAP Financial Measures
In addition to evaluating the Company's performance on a GAAP basis, we use the below key performance indicators ("KPIs") and financial measures that are not calculated according to generally accepted accounting principles ("GAAP"). We believe the non-GAAP measures of Currency Neutral ("CN") revenue growth (expressed as a percentage) and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("Adjusted EBITDA"), Adjusted EBITDA less capex, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Earnings Per Share are useful in evaluating our operating performance. These KPIs and non-GAAP financial measures help us monitor and evaluate the effectiveness of our operations and evaluate period-to-period comparisons. Management believes that these KPIs and non-GAAP financial measures help illustrate underlying trends in our business. We use KPIs and non-GAAP financial measures to establish budgets and operational goals (communicated internally and externally), manage our business and evaluate our performance. We also believe that management and investors benefit from referring to our KPIs and non-GAAP financial measures as supplemental information in assessing our performance and when planning, forecasting, and analyzing future periods. We believe our KPIs and non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to financial measures used by management in their financial and operational decision-making and also because investors and the analyst community use them to help evaluate the health of our business. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures.
In addition to evaluating the Company's performance on a GAAP basis, we use the below key performance indicators ("KPIs") and financial measures that are not calculated according to generally accepted accounting principles ("GAAP"). We believe the non-GAAP measures of Currency Neutral ("CN") revenue growth (expressed as a percentage) and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("Adjusted EBITDA"), Adjusted EBITDA less capex, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Earnings Per Share are useful in evaluating our operating performance. These KPIs and non-GAAP financial measures help us monitor and evaluate the effectiveness of our operations and evaluate period-to-period comparisons. Management believes that these KPIs and non-GAAP financial measures help illustrate underlying trends in our business. We use KPIs and non-GAAP financial measures to establish budgets and operational goals (communicated internally and externally), manage our business and evaluate our performance. We also believe that management and investors benefit from referring to our KPIs and non-GAAP financial measures as supplemental information in assessing our performance and when planning, forecasting, and analyzing future periods. We believe our KPIs and non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to financial measures used by management in their financial and operational decision-making and also because investors and the analyst community use them to help evaluate the health of our business. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures.
Key Performance Indicators
Our KPIs outlined below 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. Our KPIs are reported on a trailing, or last, 12-month basis ("LTM"), which we believe provides a more current view of the Company's operational performance than year-to-date figures.
KPI comparisons for the last twelve months ended September 30, 2024 reflect some impact from the Hollywood strikes.
| Last Twelve Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | Increase / (Decrease) | |||||||||||||||
| LTM total purchasing customers (thousands) | 703 | 719 | (2.3)% | ||||||||||||||
| LTM total active annual subscribers (thousands) | 304 | 298 | 1.7% | ||||||||||||||
|
LTM paid download volume (millions)1
|
93 | 94 | (1.3)% | ||||||||||||||
| LTM annual subscriber revenue retention rate | 90.3% | 92.2% | -190 bps | ||||||||||||||
|
Image collection (millions)
|
600 | 563 | 6.7% | ||||||||||||||
| Video collection (millions) | 35 | 31 | 13.2% | ||||||||||||||
|
LTM video attachment rate
|
16.4% | 16.4% | 0 bps | ||||||||||||||
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1Excludes downloads from Editorial Subscriptions, Editorial feeds and certain API structured deals, including bulk unlimited deals. Excludes downloads related to an agreement signed with Amazon, 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.
Total purchasing customers
Total purchasing customers is defined as the count of total customers who made a purchase within the reporting period based on billed revenue. This metric provides management and investors with an understanding of both how we are growing our purchasing customer base and combined with revenue, an understanding of our average revenue per purchasing customer. This metric differs from total customers, which is a count of all downloading customers, irrespective of whether they made a purchase in the period.
Total purchasing customers decreased 2.3% to 703,000 for the last twelve months ended September 30, 2025, compared to 719,000 for the LTM ended September 30, 2024. This decrease can be attributed to lower ALC transaction volume primarily due to the ongoing shift of our customers to more committed annual subscription products. Importantly, the shift into more committed solutions continues to have a positive impact on annual revenue per purchasing customer,
which grew by 5.5% to $1,347 for the LTM ended September 30, 2025 from $1,277 for the last twelve months ended September 30, 2024.
Total active annual subscribers
Total active annual subscribers is the count of customers who were on an annual subscription product during the LTM reporting period. This metric provides management and investors with visibility into the rate at which we are growing our annual subscriber base and is highly correlated to the percentage of our revenue that comes from annual subscription products.
Total active annual subscribers increased 1.7% to 304,000 for the LTM ended September 30, 2025 compared to 298,000 for the LTM ended September 30, 2024. Annual subscriber growth was driven by Unsplash+ subscriptions with gains partially offset by iStock subscriptions, where there has been some continued impact from the discontinuation of the free-trial customer acquisition program. We continue to maintain our strategic focus on subscription offerings to provide comprehensive content solutions.
Paid download volume
Paid download volume is a count of the number of paid downloads by our customers in the reported period. This metric informs both management and investors about the volumes at which customers are engaging with our content over time.
Paid download volume was down 1.3% to 93 million downloads for LTM ended September 30, 2025 compared to 94 million for the LTM ended September 30, 2024. We believe that the demand in paid download volumes during the LTM period that had a myriad of macro-economic challenges, is a strong outcome and signals that our content continues to meet our customers evolving needs.
Annual subscriber revenue retention rate
The annual subscriber revenue retention rate calculates retention of total revenue for customers on annual subscription products, comparing the customer's total booked revenue (inclusive of spend for annual subscription and non-annual subscription products) in the LTM period to the prior twelve month period. For example, LTM annual subscriber booked revenue (the amount of revenue invoiced to customers) for the period ended September 30, 2025 was 90.3% of revenue from these customers in the period ended September 30, 2024. The revenue retention rate informs management and investors on the degree to which we are maintaining or growing revenue from our annual subscriber base. As we continue to focus on growing subscriptions as a percentage of total revenue, revenue retention for these customers is a key driver of the predictability of our financial model with respect to revenue.
The annual subscriber revenue retention rate decreased to 90.3% for the last twelve months ended September 30, 2025 from 92.2% over the twelve months ended September 30, 2024. The decline in revenue retention was primarily attributable to the absence of certain high-impact events, tied to political, sporting and certain one-time spend, that occurred in the prior year that did not recur during the current year period. As these events are on a multi-year cycle, their absence in the current period led to a year-over-year decline in revenue retention.
The annual subscriber revenue retention rate decreased to 90.3% for the last twelve months ended September 30, 2025 from 92.2% over the twelve months ended September 30, 2024. The decline in revenue retention was primarily attributable to the absence of certain high-impact events, tied to political, sporting and certain one-time spend, that occurred in the prior year that did not recur during the current year period. As these events are on a multi-year cycle, their absence in the current period led to a year-over-year decline in revenue retention.
Image and Video collection
Image and Video collection is a count of the total images and videos in our content library as of the reporting date. Management and investors can view growth in the size, both depth and breadth, of the content library as an indication of our ability to continue to expand our content offering with premium, high quality, contemporary content to meet the evolving needs of our customers. Image and video collections increased as of September 30, 2025 compared to September 30, 2024. Our image collection grew 6.7% to 600 million images as of September 30, 2025 compared to 563 million as of September 30, 2024. Our video collection grew 13.2% to 35 million videos over the same period.
Video attachment rate
Video attachment rate is a measure of the percentage of total paid customer downloaders who are video downloaders. Customer demand for video content continues to grow and represents a significant opportunity for revenue growth for Getty Images. The video attachment rate provides management and investors with an indication of our customers' level of engagement with our video content offering. Our expansion of video across our subscription products is focused on further increasing the attachment rate over time.
The video attachment rate was flat at 16.4% for the last twelve months ended September 30, 2025 and September 30, 2024. The video attachment rate provides management and investors with an indication of our customers' level of engagement with our video content offering. Our expansion of video across our subscription products is focused on further increasing the attachment rate over time. The increase in video attachment rates reflects increased customer awareness of our video offering, improved search and site prominence for video content, and upselling of video into subscriptions.
Non-GAAP Financial Measures
Currency Neutral Revenue
Currency Neutral revenue changes (expressed as a percentage) exclude the impact of fluctuating foreign currency values pegged to the U.S. dollar between comparative periods by translating all local currencies using the current period exchange rates. We consistently apply this approach to revenue for all countries where the functional currency is not the U.S. dollar. We believe that this presentation provides useful supplemental information regarding changes in our revenue not driven by fluctuations in the value of foreign currencies.
Reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBITDA less Capex
We define Adjusted EBITDA as net income before interest, taxes, depreciation, amortization, equity-based compensation, other operating expenses-net, and certain other expenses not directly related to the core operations of our business. A reconciliation is provided below to the most comparable financial measure stated in accordance with U.S. GAAP. We define Adjusted EBITDA Margin as the ratio of Adjusted EBITDA to revenue.
| (In thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net (loss) income | $ | 21,618 | $ | (2,527) | $ | (115,313) | $ | 14,749 | ||||||||||||||||||
| Add/(less) non-GAAP adjustments: | ||||||||||||||||||||||||||
| Depreciation and amortization | 16,558 | 15,469 | 48,179 | 45,644 | ||||||||||||||||||||||
| Other operating expense - net | 10,420 | 219 | 39,334 | 3,627 | ||||||||||||||||||||||
| Loss on litigation | 2,614 | 3,199 | 8,964 | 8,013 | ||||||||||||||||||||||
| Interest expense | 35,746 | 34,004 | 104,977 | 100,618 | ||||||||||||||||||||||
|
Fair value adjustments, foreign exchange and other non-operating (income) expense 1
|
(2,193) | 27,205 | 81,685 | 7,108 | ||||||||||||||||||||||
| Loss on extinguishment of debt | - | - | 5,474 | - | ||||||||||||||||||||||
| Income tax (benefit) expense | (10,057) | (1,246) | 31,193 | 22,453 | ||||||||||||||||||||||
| Equity-based compensation expense, net of capitalization | 4,004 | 4,306 | 12,315 | 17,454 | ||||||||||||||||||||||
| Adjusted EBITDA | 78,710 | 80,629 | 216,808 | 219,666 | ||||||||||||||||||||||
| Capex | 14,735 | 12,482 | 46,552 | 42,313 | ||||||||||||||||||||||
| Adjusted EBITDA less capex | 63,975 | 68,147 | 170,256 | 177,352 | ||||||||||||||||||||||
| Net (loss) income margin | 9.0 | % | (1.1) | % | (16.5) | % | 2.1 | % | ||||||||||||||||||
| Adjusted EBITDA margin | 32.8 | % | 33.5 | % | 31.0 | % | 31.7 | % | ||||||||||||||||||
| Adj EBITDA less Capex Margin | 26.7 | % | 28.3 | % | 24.4 | % | 25.6 | % | ||||||||||||||||||
(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 Adjusted Net Income and Adjusted Earnings Per Share
Adjusted Net Income and Adjusted Earnings Per Share are non-GAAP financial measures that we use to provide a more meaningful comparison of our core operating results from period to period. These measures exclude the impact of certain items that we believe are not indicative of our core operating performance. These adjustments include, but are not
limited to, foreign exchange gains (losses), net and other non-recurring items. The following table reconciles Net Income (Loss) and Earnings (Loss) Per Share, the most directly comparable GAAP measures, to Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share for the periods presented:
| (In thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net (loss) income | $ | 21,618 | $ | (2,527) | $ | (115,313) | $ | 14,749 | ||||||||||||||||||
| Add/(less) non-GAAP adjustments: | ||||||||||||||||||||||||||
| Equity-based compensation expense | 4,004 | 4,306 | 12,315 | 17,454 | ||||||||||||||||||||||
|
Tax effect of equity-based compensation expense1
|
(1,023) | (1,100) | (3,140) | (4,455) | ||||||||||||||||||||||
| Loss on litigation | 2,614 | 3,199 | 8,964 | 8,013 | ||||||||||||||||||||||
|
Tax effect of loss on litigation, net of recovery1
|
(680) | (832) | (2,332) | (2,085) | ||||||||||||||||||||||
| Foreign exchange | (1,492) | 28,657 | 78,357 | 9,796 | ||||||||||||||||||||||
|
Tax effect on foreign exchange (loss) gain - net1
|
5 | (7,681) | (22,444) | (2,546) | ||||||||||||||||||||||
| Acquisition related costs | 9,932 | - | 38,228 | 1,100 | ||||||||||||||||||||||
|
Tax effect of acquisition related costs1
|
(1,504) | - | (9,886) | (286) | ||||||||||||||||||||||
| Loss on debt extinguishment and expensed financing costs | - | - | 11,508 | - | ||||||||||||||||||||||
|
Tax effect of loss on debt extinguishment and expensed financing costs1
|
- | (2,993) | - | |||||||||||||||||||||||
| Adjusted net income (loss) | $ | 33,475 | $ | 24,022 | $ | (6,736) | $ | 41,739 | ||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.05 | $ | (0.01) | $ | (0.28) | $ | 0.04 | ||||||||||||||||||
| Adjusted diluted earnings per share | $ | 0.08 | $ | 0.06 | $ | (0.02) | $ | 0.10 | ||||||||||||||||||
| Weighted average diluted shares | 415,204,506 | 410,473,104 | 413,751,518 | 413,276,301 | ||||||||||||||||||||||
1 Statutory tax rates used to calculate the tax effect of the adjustments.
Critical Accounting Policies
A description of our critical accounting policies that involve significant management judgment appears in our 2024 Form 10-K, under "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical accounting policies and estimates." Our accounting policies are also described in Note 2 - Summary of Significant Accounting Policies, to our Consolidated Financial Statements in our 2024 Form 10-K and in Note 2 - Summary of Significant Accounting Policies, to our interim condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the period ended September 30, 2025. We believe our most critical accounting policies include revenue recognition, accrued litigation reserves, and accounting for income taxes.
Getty Images Holdings Inc. published this content on November 10, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 10, 2025 at 21:26 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]