Getty Images Holdings, Inc. “Getty Images” or the “Company”) (NYSE:
GETY), a preeminent global visual content creator and marketplace,
today reported financial results for the fourth quarter and full
year ended December 31, 2023.
“In a difficult 2023, Getty Images continued to
lay a strong foundation grounded in our core value propositions of
helping our customers create at a higher level, saving them time
and money and eliminating risk,” said Craig Peters, Chief Executive
Officer at Getty Images. “Central to this foundation is Getty
Images’ high-quality content and coverage derived from
industry-leading talent, committed and long-standing partnerships,
exclusive access, extensive research and rare expertise.”
“In 2023, we remained fiscally disciplined,
generated healthy levels of free cash flow, and ended the year with
a strong balance sheet,” said Jenn Leyden, Chief Financial Officer
at Getty Images. “And as we look to 2024, we believe that we are
well positioned to return to top line growth while remaining
fiscally disciplined to continue to deliver healthy
profitability.”
Fourth Quarter
2023 Financial Summary:
- Revenue of $225.9 million declined
2.4% year over year and 4.0% on a currency neutral basis.
- Creative revenue of $145.8 million,
up 0.5% year over year and down 1.0% on a currency neutral
basis.
- Editorial revenue of $75.7 million, down 7.9% year over year
and 9.5% on a currency neutral basis, due in large part to the
slowdown related to the Hollywood actors and writers strikes.
- Annual Subscription Revenue as a
percentage of total revenue grew to 54.5% up from 50.2% in
Q4'22.
- Net Income of $39.1 million,
compared to a Net Loss of $23.3 million in Q4'22. Included in these
results is a $58.0 million tax benefit related primarily to a
valuation release, partially offset by a $3.5 million Loss on
Litigation related to previously disclosed warrant litigation and a
$20.0 million unrealized loss related to the change in fair value
of the Company’s euro term loan. Net Income Margin was 17.3%
compared to (10.1%) in Q4'22.
- Adjusted EBITDA* of $72.2 million,
down 4.5% year over year and down 6.5% on a currency neutral basis
due primarily to the lower revenue. Adjusted EBITDA Margin* was
31.9% compared to 32.6% in Q4'22.
- Adjusted EBITDA less Capex* was
$57.0 million, down 8.5% year over year and 10.3% on a currency
neutral basis.
Full Year 2023
Financial Summary:
- Revenue of $916.6 million declined
1.0% year over year and 0.5% on a currency neutral basis.
- Creative revenue of $578.7 million,
down 1.1% year over year and down 0.6% on a currency neutral
basis.
- Editorial revenue of $320.6
million, down 1.6% year over year and 1.2% on a currency neutral
basis. The year-over-year decline was due primarily to the impact
of the two Hollywood strikes.
- Annual Subscription Revenue as a
percentage of total revenue grew to 53.2%, up from 49.0% in
2023.
- Net Income of $19.6 million,
compared to a Net Loss of $77.6 million in 2022. Included in these
results is a $116.1 million Loss on Litigation related to
previously disclosed warrant litigation, partially offset by $60.0
million Recovery of Loss on Litigation from the Company’s D&O
insurance policy. The 2022 results included a $160.7 million net
loss on fair value adjustment for the warrant liabilities. Net
Income Margin was 2.1% compared to Net Loss Margin of 8.4% in
2022.
- Adjusted EBITDA* of $301.4 million,
down 1.2% year over year and down 0.4% on a currency neutral basis.
Adjusted EBITDA Margin* was a strong 32.9% in both 2023 and 2022.
Adjusted EBITDA margin remained steady in 2023 despite topline
challenges as a result of Management’s proactive cost actions
executed in Q2 and maintained throughout the year – a further
demonstration of the Company’s fiscal discipline and ability to
maintain profitability.
- Adjusted EBITDA less Capex* was
$244.4 million, down 0.5% year over year and up 0.7% on a currency
neutral basis.
Liquidity and Balance Sheet:
- Net cash provided by operating
activities of $33.7 million in Q4'23, compared to $33.9 million in
the prior year period.
- Free cash flow* of $18.6 million in
Q4'23, compared to $20.6 million in the prior year period.
- Ending cash balance on December 31, 2023 was $136.6
million, up $38.7 million from the ending balance on
December 31, 2022 and $23.1 million from September 30, 2023.
We have $150.0 million available through our Revolver, for total
available liquidity of $286.6 million.
- Total debt was $1.401 billion,
which included $300 million in senior notes and a term loan balance
of $1.101 billion, consisting of $637.0 million in USD and $463.6
million in USD equivalent of Euros, converted using exchange rates
as of December 31, 2023.
* 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)7
|
Last Twelve Months Ended December 31, |
|
2023 |
|
|
2022 |
|
|
Y/Y Change |
LTM total purchasing customers
(thousands)1 |
799 |
|
|
835 |
|
|
(4.3 |
)% |
LTM total active
annual subscribers (thousands)2 |
236 |
|
|
129 |
|
|
82.9 |
% |
LTM paid download
volume (millions)3 |
95 |
|
|
95 |
|
|
— |
% |
LTM annual subscriber
revenue retention rate4 |
92.4 |
% |
|
100.1 |
% |
|
-770 bps |
Image collection
(millions)5 |
535 |
|
|
497 |
|
|
7.6 |
% |
Video collection
(millions) 5 |
28 |
|
|
24 |
|
|
16.7 |
% |
LTM video attachment
rate6 |
14.1 |
% |
|
13.1 |
% |
|
+100 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.
Annual subscription - includes all products with
a duration of 12 months or longer
1 The count of total customers who made a
purchase within the reporting period based on billed revenue. 2 The
count of customers who were on an annual subscription product
during the reporting period. 3 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.4 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. 5 A count of the total images and videos in our content
library as of the reporting date.6 A measure of the percentage of
total paid customer downloaders who are video downloaders. 7The
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.
Financial Outlook for Full Year 2024
The following tables summarize Getty Images’
fiscal year 2024 guidance:
|
2024 Guidance |
Revenue |
$928 million to $947 million |
Revenue YoY |
1.3% to 3.3% |
Revenue YoY, Currency Neutral |
1.0% to 3.0% |
Adjusted EBITDA |
~$298 million |
Adjusted EBITDA YoY |
~(1.2)% |
Adjusted EBITDA YoY, Currency Neutral |
~(1.5)% |
Webcast & Conference Call
InformationThe Company will host a conference call and
live webcast with the investment community at 5:00 p.m. Eastern
Time today, Thursday, March 14, 2024, to discuss its fourth
quarter and full year 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 13744352.
About Getty ImagesGetty 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 557,000 contributors and more than 320 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.
Through its best-in-class creative library
and Custom Content solutions, Getty Images helps customers elevate
their creativity and entire end‑to‑end creative process to find the
right visual for any need. With the adoption and distribution of
generative AI technologies and tools trained on permissioned
content and uncapped indemnification and perpetual, worldwide usage
rights, Getty Images and iStock customers can use text to
image generation to ideate and create commercially safe compelling
visuals, further expanding Getty Images capabilities to deliver
exactly what customers are looking for.
For company news and announcements, visit our
Newsroom.
Forward-Looking
StatementsCertain 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 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 its existing customers; the user experience of our
customers on its 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 (“AI”), including statements regarding AI
and innovation momentum; 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,
could further impact our entertainment business; 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, 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, 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, judgements, 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 effect 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” 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 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 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 Press Release are more fully described under the
heading “Item 1A. Risk Factors” in our most recently filed Annual
Report on Form 10-K. The risks described under the heading “Item
1A. Risk Factors” 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.
|
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share and per
share amounts) |
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUE |
$ |
225,940 |
|
|
$ |
231,466 |
|
|
$ |
916,555 |
|
|
$ |
926,244 |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSE: |
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization shown
separately below) |
$ |
62,670 |
|
|
$ |
63,938 |
|
|
$ |
250,249 |
|
|
$ |
254,990 |
|
Selling, general and administrative expenses |
|
101,586 |
|
|
|
95,327 |
|
|
|
402,516 |
|
|
|
375,582 |
|
Depreciation |
|
14,025 |
|
|
|
12,276 |
|
|
|
54,374 |
|
|
|
49,574 |
|
Amortization |
|
2,304 |
|
|
|
7,969 |
|
|
|
24,069 |
|
|
|
43,645 |
|
Loss on litigation |
|
3,502 |
|
|
|
1,101 |
|
|
|
116,051 |
|
|
|
1,101 |
|
Recovery of loss on litigation |
|
— |
|
|
|
— |
|
|
|
(60,000 |
) |
|
|
— |
|
Other operating expense (income) – net |
|
1,037 |
|
|
|
(4,777 |
) |
|
|
1,624 |
|
|
|
(681 |
) |
Operating expense |
|
185,124 |
|
|
|
175,834 |
|
|
|
788,883 |
|
|
|
724,211 |
|
INCOME FROM OPERATIONS |
|
40,816 |
|
|
|
55,632 |
|
|
|
127,672 |
|
|
|
202,033 |
|
|
|
|
|
|
|
|
|
OTHER EXPENSE, NET: |
|
|
|
|
|
|
|
Interest expense |
|
(32,449 |
) |
|
|
(28,246 |
) |
|
|
(126,884 |
) |
|
|
(117,229 |
) |
(Loss) gain on fair value adjustment for swaps and foreign currency
exchange contract – net |
|
(2,526 |
) |
|
|
731 |
|
|
|
(7,573 |
) |
|
|
23,508 |
|
Unrealized foreign exchange (losses) gain – net |
|
(26,167 |
) |
|
|
(47,262 |
) |
|
|
(23,772 |
) |
|
|
24,643 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,693 |
) |
Net loss on fair value adjustment for warrant liabilities |
|
— |
|
|
|
611 |
|
|
|
— |
|
|
|
(160,728 |
) |
Other non-operating income (expense) – net |
|
1,426 |
|
|
|
357 |
|
|
|
3,652 |
|
|
|
(3,051 |
) |
|
|
|
|
|
|
|
|
Total other expense – net |
|
(59,716 |
) |
|
|
(73,809 |
) |
|
|
(154,577 |
) |
|
|
(235,550 |
) |
(LOSS) INCOME BEFORE INCOME
TAXES |
|
(18,900 |
) |
|
|
(18,177 |
) |
|
|
(26,905 |
) |
|
|
(33,517 |
) |
INCOME TAX BENEFIT
(EXPENSE) |
|
57,999 |
|
|
|
(5,152 |
) |
|
|
46,482 |
|
|
|
(44,126 |
) |
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
39,099 |
|
|
|
(23,329 |
) |
|
|
19,577 |
|
|
|
(77,643 |
) |
Less: |
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interest |
|
(10 |
) |
|
|
(402 |
) |
|
|
238 |
|
|
|
(89 |
) |
Premium on early redemption of Redeemable Preferred Stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,678 |
|
Redeemable Preferred Stock dividend |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
43,218 |
|
NET INCOME (LOSS) ATTRIBUTABLE
TO GETTY IMAGES HOLDINGS, INC. |
$ |
39,109 |
|
|
$ |
(22,927 |
) |
|
$ |
19,339 |
|
|
$ |
(147,450 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to Class A Getty Images
Holdings, Inc. common stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.10 |
|
|
$ |
(0.06 |
) |
|
$ |
0.05 |
|
|
$ |
(0.53 |
) |
Diluted |
|
0.09 |
|
|
|
(0.06 |
) |
|
|
0.05 |
|
|
|
(0.53 |
) |
|
|
|
|
|
|
|
|
Weighted-average Class A common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
403,624,218 |
|
|
|
394,770,652 |
|
|
|
399,037,805 |
|
|
|
276,942,660 |
|
Diluted |
|
414,566,379 |
|
|
|
394,770,652 |
|
|
|
411,495,025 |
|
|
|
276,942,660 |
|
|
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED BALANCE
SHEETS(In thousands, except share and par value
data) |
|
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
136,623 |
|
|
$ |
97,912 |
|
Restricted cash |
|
4,227 |
|
|
|
4,482 |
|
Accounts receivable – net of allowance of $6,526 and $6,460,
respectively |
|
138,730 |
|
|
|
129,603 |
|
Prepaid expenses |
|
15,798 |
|
|
|
15,728 |
|
Insurance recovery receivable |
|
48,615 |
|
|
|
— |
|
Taxes receivable |
|
9,758 |
|
|
|
11,297 |
|
Other current assets |
|
11,253 |
|
|
|
10,497 |
|
Total current assets |
|
365,004 |
|
|
|
269,519 |
|
PROPERTY AND EQUIPMENT –
NET |
|
179,378 |
|
|
|
172,083 |
|
RIGHT OF USE ASSETS |
|
41,098 |
|
|
|
47,231 |
|
GOODWILL |
|
1,501,814 |
|
|
|
1,499,578 |
|
IDENTIFIABLE INTANGIBLE ASSETS
– NET |
|
403,805 |
|
|
|
419,548 |
|
DEFERRED INCOME TAXES –
NET |
|
69,400 |
|
|
|
8,272 |
|
OTHER LONG-TERM ASSETS |
|
41,262 |
|
|
|
51,952 |
|
TOTAL |
$ |
2,601,761 |
|
|
$ |
2,468,183 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
102,525 |
|
|
$ |
93,766 |
|
Accrued expenses |
|
43,653 |
|
|
|
49,327 |
|
Income taxes payable |
|
11,325 |
|
|
|
8,031 |
|
Litigation reserves |
|
98,149 |
|
|
|
— |
|
Deferred revenue |
|
176,349 |
|
|
|
171,371 |
|
Total current liabilities |
|
432,001 |
|
|
|
322,495 |
|
LONG-TERM DEBT – NET |
|
1,398,658 |
|
|
|
1,428,847 |
|
LEASE LIABILITIES |
|
39,858 |
|
|
|
46,218 |
|
DEFERRED INCOME TAXES –
NET |
|
21,580 |
|
|
|
37,075 |
|
UNCERTAIN TAX POSITIONS |
|
24,772 |
|
|
|
37,333 |
|
OTHER LONG-TERM
LIABILITIES |
|
3,462 |
|
|
|
3,167 |
|
Total liabilities |
$ |
1,920,331 |
|
|
$ |
1,875,135 |
|
Commitments and contingencies (Note 13) |
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
Preferred Stock, $0.0001 par value; 1.0 million shares authorized;
no shares issued and outstanding as of December 31, 2023 and
December 31, 2022. |
$ |
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value: 2.0 billion shares
authorized; 405.0 million shares issued and outstanding as of
December 31, 2023 and 394.8 million shares issued and
outstanding as of December 31, 2022 |
|
40 |
|
|
|
39 |
|
Class B common stock, $0.0001 par value: 5.1 million shares
authorized; no shares issued and no shares outstanding as of
December 31, 2023 and December 31, 2022. |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,983,276 |
|
|
|
1,936,324 |
|
Accumulated deficit |
|
(1,263,015 |
) |
|
|
(1,282,354 |
) |
Accumulated other comprehensive loss |
|
(87,076 |
) |
|
|
(108,928 |
) |
Total Getty Images Holdings,
Inc. stockholders’ equity |
$ |
633,225 |
|
|
$ |
545,081 |
|
Noncontrolling interest |
|
48,205 |
|
|
|
47,967 |
|
Total stockholders’ equity |
|
681,430 |
|
|
|
593,048 |
|
TOTAL |
$ |
2,601,761 |
|
|
$ |
2,468,183 |
|
|
GETTY IMAGES
HOLDINGS, INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands) |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net income (loss) |
$ |
19,577 |
|
|
$ |
(77,643 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
Depreciation |
|
54,374 |
|
|
|
49,574 |
|
Amortization |
|
24,069 |
|
|
|
43,645 |
|
Unrealized exchange gains on foreign denominated debt |
|
16,579 |
|
|
|
(26,636 |
) |
Equity-based compensation |
|
37,652 |
|
|
|
9,292 |
|
Non-cash fair value adjustment for common stock warrants |
|
— |
|
|
|
160,728 |
|
Deferred income taxes – net |
|
(76,624 |
) |
|
|
15,801 |
|
Uncertain tax positions |
|
(12,561 |
) |
|
|
(5,368 |
) |
Non-cash fair value adjustment for swaps and foreign currency
exchange contracts |
|
7,573 |
|
|
|
(22,005 |
) |
Amortization of debt issuance costs |
|
3,965 |
|
|
|
6,096 |
|
Non cash operating lease costs |
|
12,173 |
|
|
|
9,760 |
|
Impairment of right of use assets |
|
— |
|
|
|
2,563 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
2,693 |
|
Transaction costs allocated to common stock warrants |
|
— |
|
|
|
4,262 |
|
Non-cash fair value adjustment of contingent consideration |
|
— |
|
|
|
(4,039 |
) |
Other |
|
4,458 |
|
|
|
3,428 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
(11,704 |
) |
|
|
6,016 |
|
Accounts payable |
|
9,799 |
|
|
|
6,001 |
|
Accrued expenses |
|
(6,808 |
) |
|
|
(14,231 |
) |
Insurance recovery receivable |
|
(48,615 |
) |
|
|
— |
|
Litigation reserves |
|
98,149 |
|
|
|
— |
|
Lease liabilities, non-current |
|
(13,187 |
) |
|
|
(11,408 |
) |
Income taxes receivable/payable |
|
8,027 |
|
|
|
(188 |
) |
Deferred revenue |
|
4,532 |
|
|
|
9,140 |
|
Other |
|
1,288 |
|
|
|
(4,364 |
) |
Net cash provided by operating
activities |
|
132,716 |
|
|
|
163,117 |
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
Acquisition of property and equipment |
|
(56,999 |
) |
|
|
(59,291 |
) |
Purchase of a minority investment |
|
— |
|
|
|
(2,000 |
) |
Net cash used in investing
activities |
|
(56,999 |
) |
|
|
(61,291 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Repayment of debt |
|
(50,400 |
) |
|
|
(310,400 |
) |
Payment of contingent consideration |
|
— |
|
|
|
(10,000 |
) |
Payment of Redeemable Preferred Stock |
|
— |
|
|
|
(614,996 |
) |
Cash contributions from business combination |
|
— |
|
|
|
864,164 |
|
Cash paid for debt issuance costs |
|
(1,137 |
) |
|
|
— |
|
Proceeds from common stock issuance |
|
15,050 |
|
|
|
— |
|
Cash paid for settlement of employee taxes related to exercise of
equity-based awards |
|
(8,713 |
) |
|
|
(6,267 |
) |
Cash paid for equity issuance costs |
|
(150 |
) |
|
|
(106,917 |
) |
Proceeds from option and warrant exercises |
|
— |
|
|
|
313 |
|
Redemption of warrants for cash |
|
— |
|
|
|
(244 |
) |
Net cash used in financing
activities |
|
(45,350 |
) |
|
|
(184,347 |
) |
|
|
|
|
EFFECTS OF EXCHANGE RATE
FLUCTUATIONS |
|
8,089 |
|
|
|
(6,614 |
) |
NET INCREASE (DECREASE) IN
CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
38,456 |
|
|
|
(89,135 |
) |
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH - Beginning of period |
|
102,394 |
|
|
|
191,529 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH - End of period |
$ |
140,850 |
|
|
$ |
102,394 |
|
Non-GAAP Financial Measures
In 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 December
31, |
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
|
$ |
39,099 |
|
|
$ |
(23,329 |
) |
|
$ |
19,577 |
|
|
$ |
(77,643 |
) |
Add/(less) non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
$ |
16,329 |
|
|
$ |
20,245 |
|
|
$ |
78,443 |
|
|
$ |
93,219 |
|
Loss on litigation, net of
recovery1 |
|
$ |
3,502 |
|
|
$ |
1,101 |
|
|
$ |
56,051 |
|
|
$ |
1,101 |
|
Other operating expense
(income) – net |
|
$ |
1,037 |
|
|
$ |
(4,777 |
) |
|
$ |
1,624 |
|
|
$ |
(681 |
) |
Interest expense |
|
$ |
32,449 |
|
|
$ |
28,246 |
|
|
$ |
126,884 |
|
|
$ |
117,229 |
|
Fair value adjustments,
foreign exchange and other non-operating expense (income) 2 |
|
$ |
27,267 |
|
|
$ |
46,174 |
|
|
$ |
27,693 |
|
|
$ |
(45,100 |
) |
Loss on extinguishment of
debt |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,693 |
|
Loss on fair value adjustment
for warrant liabilities — net |
|
$ |
— |
|
|
$ |
(611 |
) |
|
$ |
— |
|
|
$ |
160,728 |
|
Income tax expense |
|
$ |
(57,999 |
) |
|
$ |
5,152 |
|
|
$ |
(46,482 |
) |
|
$ |
44,126 |
|
Equity-based compensation
expense |
|
$ |
10,467 |
|
|
$ |
3,354 |
|
|
$ |
37,652 |
|
|
$ |
9,292 |
|
Adjusted EBITDA |
|
$ |
72,151 |
|
|
$ |
75,555 |
|
|
$ |
301,442 |
|
|
$ |
304,964 |
|
Capex |
|
$ |
15,128 |
|
|
$ |
13,257 |
|
|
$ |
56,998 |
|
|
$ |
59,291 |
|
Adjusted EBITDA less
capex |
|
$ |
57,023 |
|
|
$ |
62,298 |
|
|
$ |
244,444 |
|
|
$ |
245,673 |
|
Net income (loss) margin |
|
|
17.3 |
% |
|
(10.1 |
)% |
|
|
2.1 |
% |
|
(8.4 |
)% |
Adjusted EBITDA Margin |
|
|
31.9 |
% |
|
|
32.6 |
% |
|
|
32.9 |
% |
|
|
32.9 |
% |
1 Beginning in the third quarter 2023 reporting
period, the Company reclassified historical legal fees associated
with our warrant litigation from “Selling, general and
administrative expenses” to “Loss on litigation” within the
Condensed Consolidated Statements of Operations. The aggregate
amount of these fees reported through June 30, 2023 totaled $7.5
million, with $1.1 million recognized for the three months ended
December 31, 2022 and $6.4 million recognized for the six months
ended June 30, 2023. This change is classification serves to
increase our Adjusted EBITDA by $6.4 million for the year ended
December 31, 2023, when compared to classification in prior
periods.2 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
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
(in millions) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net cash provided by operating activities |
|
$33.7 |
|
$33.9 |
|
$132.7 |
|
$163.1 |
Acquisition of property and
equipment |
|
$(15.1) |
|
$(13.3) |
|
$(57.0) |
|
$(59.3) |
Free Cash
Flow |
|
$18.6 |
|
$20.6 |
|
$75.7 |
|
$103.8 |
OTHER FINANCIAL DATA
Revenue by Product
|
|
Three Months Ended December 31, |
|
increase / (decrease) |
(In thousands) |
|
|
2023 |
|
|
% of revenue |
|
|
2022 |
|
|
% of revenue |
|
$ change |
|
% change |
|
CN % change |
Creative |
|
|
145,800 |
|
|
64.5 |
% |
|
|
145,100 |
|
|
62.7 |
% |
|
|
700 |
|
|
0.5 |
% |
|
(1.0 |
)% |
Editorial |
|
|
75,732 |
|
|
33.5 |
% |
|
|
82,228 |
|
|
35.5 |
% |
|
|
(6,496 |
) |
|
(7.9 |
)% |
|
(9.5 |
)% |
Other |
|
|
4,408 |
|
|
2.0 |
% |
|
|
4,137 |
|
|
1.8 |
% |
|
|
271 |
|
|
6.6 |
% |
|
5.2 |
% |
Total
revenue |
|
$ |
225,940 |
|
|
100.0 |
% |
|
$ |
231,465 |
|
|
100.0 |
% |
|
$ |
(5,525 |
) |
|
(2.4 |
)% |
|
(4.0 |
)% |
Certain prior year amounts have been reclassified to conform to
the current year presentation.
|
|
Twelve Months Ended December 31, |
|
increase / (decrease) |
(In thousands) |
|
|
2023 |
|
|
% of revenue |
|
|
2022 |
|
|
% of revenue |
|
$ change |
|
% change |
|
CN % change |
Creative |
|
|
578,727 |
|
|
63.1 |
% |
|
|
585,398 |
|
|
63.2 |
% |
|
|
(6,671 |
) |
|
(1.1 |
)% |
|
(0.6 |
)% |
Editorial |
|
|
320,643 |
|
|
35.0 |
% |
|
|
325,779 |
|
|
35.2 |
% |
|
|
(5,136 |
) |
|
(1.6 |
)% |
|
(1.2 |
)% |
Other |
|
|
17,185 |
|
|
1.9 |
% |
|
|
15,067 |
|
|
1.6 |
% |
|
|
2,118 |
|
|
14.1 |
% |
|
14.9 |
% |
Total
revenue |
|
$ |
916,555 |
|
|
100.0 |
% |
|
$ |
926,244 |
|
|
100.0 |
% |
|
$ |
(9,689 |
) |
|
(1.0 |
)% |
|
(0.5 |
)% |
Certain prior year amounts have been
reclassified to conform to the current year presentation.
Balance Sheet &
Liquidity
($ millions) |
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31 2022 |
Cash & Cash Equivalents1 |
|
136.6 |
|
|
113.5 |
|
|
97.9 |
|
Available under Revolving
Credit Facility2 |
|
150.0 |
|
|
150.0 |
|
|
80.0 |
|
Liquidity |
|
286.6 |
|
|
263.5 |
|
|
177.9 |
|
Term Loans Outstanding - USD
Tranche |
|
637.0 |
|
|
639.6 |
|
|
687.4 |
|
Term Loans Outstanding - EUR
Tranche3 |
|
463.6 |
|
|
443.6 |
|
|
447.0 |
|
Total Balance - Term Loans
Outstanding4 |
|
1,100.6 |
|
|
1,083.2 |
|
|
1,134.4 |
|
Senior Notes |
|
300.0 |
|
|
300.0 |
|
|
300.0 |
|
1 Excludes restricted cash of $4.2 million as of
December 31, 2023, $4.3 million as of September 2023 and
$4.5 million as of December 31, 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 December 31, 2023 of 1.11, September 30, 2023 of 1.06 and
December 31, 2022 of 1.07.4 Represents face value of debt, not GAAP
carrying value.
Investor Contact:
Getty ImagesSteven
KannerInvestorrelations@gettyimages.com
Media Contacts:
Getty ImagesAnne
FlanaganAnne.flanagan@gettyimages.com
Getty Images (NYSE:GETY)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Getty Images (NYSE:GETY)
Historical Stock Chart
Von Mai 2023 bis Mai 2024