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 first quarter
ended March 31, 2023.
“We are pleased to report a quarter of revenue
growth, all of which is organic, despite foreign exchange
pressures, driven by strong subscription growth, subscription
renewal rates, new customer growth and increased consumption of our
content,” said Craig Peters, Chief Executive Officer of Getty
Images. “The increased customer commitment and consumption is
underpinned by the uniqueness and quality of our content offerings.
We are focused on expanding this differentiation alongside
embracing new capabilities to increase the value we provide to our
customers and create new and recurring revenue streams.”
First Quarter 2023 Financial Summary:
- Revenue of $235.6 million grew 2% year over year. On a currency
neutral basis, revenues increased 5.5%.
- Creative revenue of $146.5 million, down 1.3% year over year
and up 1.9% on a currency neutral basis.
- Editorial revenue of $84.6 million, up 7.5% year over year and
11.3% on a currency neutral basis.
- Annual Subscription Revenue as a percentage of total revenue
grew to over 50%, up from 48.3% in Q1’22 and up from a finish of
49% for the full year 2022.
- Net Income of $3.2 million, down from $25.1 million from Q1’22.
Included in Q1’23 was a $9.5 million unrealized loss related to the
change in fair value of the Company’s Euro term loan and a $2.1
million loss related to the mark-to-market on an interest rate
swap, compared with gains of $5.6 million on the Euro term loan and
$12.1 million on the interest rate swap in Q1’22. Net Income
Margin was 1.4% compared to 10.9% in Q1’22.
- Adjusted EBITDA* of $76.1 million, down 2% year over year due
to the impact of foreign exchange on revenue and the incremental
expenses of operating as a public company. On a currency neutral
basis, adjusted EBITDA was up 2.2%. Adjusted EBITDA Margin* was
32.3% compared to 33.6% in Q1’22.
- Adjusted EBITDA less capex* was $60.6 million, down 1.4% year
over year and up 3.8% on a currency neutral basis.
Liquidity and Balance Sheet:
- Net cash provided by operating activities of $31.9 million in
Q1’23, compared to $49.4 million in the prior year period.
- Free cash flow* of $16.4 million in Q1’23, compared to $33.1
million in the prior year period.
- Ending cash balance on March 31, 2023 was $116.8 million, up
$18.9 million from the ending balance on December 31, 2022 and a
decrease of $94 million from March 31, 2022. The Company had $80
million available through its Revolver at quarter end, which
remained undrawn, for total liquidity of $196.8 million.
- On May 4, 2023, the Company amended the Revolver, upsizing the
facility to $150 million and extending the maturity to May 4, 2028.
The amended facility provides the Company with increased liquidity
and greater operating flexibility.
- The Company’s total debt was $1.441 billion, which included
$300 million in senior notes and a term loan balance of $1.141
billion, consisting of $684.8 million in USD and $456.5 million in
USD equivalent of Euros, converted using exchange rates as of March
31, 2023. After the close of the quarter, in line with its
commitment to further delever the balance sheet, the Company made a
voluntary repayment on the USD term loan of $20 million in May from
balance sheet cash.
* Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted EBITDA less capex, and Free Cash Flow are non-GAAP
financial measures. Refer to the Reconciliation of GAAP and
Non-GAAP Financial Measures section below.
Key
Performance Indicators (KPIs)1,8 |
|
|
Last Twelve Months (“LTM”) Ended March 31, |
|
20231 |
|
|
2022 |
|
|
Y/Y Change |
LTM total purchasing
customers (thousands)2 |
829 |
|
|
825 |
|
|
+0.5% |
LTM total active
annual subscribers (thousands)3 |
150 |
|
|
81 |
|
|
+85.1% |
LTM paid download
volume (millions)4 |
95 |
|
|
89 |
|
|
+6.6% |
LTM annual subscriber
revenue retention rate5 |
99.8% |
|
|
104.6% |
|
|
-480 bps |
Image collection
(millions)6 |
510 |
|
|
466 |
|
|
+9.5% |
Video collection
(millions) 6 |
25 |
|
|
21 |
|
|
+19.0% |
LTM video attachment
rate7 |
13.4% |
|
|
12.0% |
|
|
+140 bps |
|
|
|
|
|
|
|
|
Note: The Key Operating Metrics outlined are the
metrics that provide management with the most immediate
understanding of the drivers of business performance and our
ability to deliver shareholder return, track to financial targets
and prioritize customer satisfaction. Note, KPI comparisons to
periods prior to trailing twelve-months ended March 31, 2023
reflect some COVID-19 impact.
Annual subscription - includes
products with a duration of 12 months or longer
1 Beginning with the three months ended
September 30, 2022, the Company made two changes to its reporting
that has some impact on reported KPI’s. First, activity for LATAM,
Turkey and Israel, which was previously excluded from these
metrics, is now included due to completion of a system migration.
Additionally, the method by which we aggregate our customer
accounts was updated to better align with our internal sales CRM
system. We have not restated historical periods given the
immaterial impact to the KPI’s, except for LTM total active annual
subscribers and LTM annual subscriber revenue retention rate for
which the legacy reporting format is detailed in noted 3 and 5
below.2 The count of total customers who made a purchase
within the reporting period based on billed revenue.
3 The count of customers who were on an annual
subscription product during the reporting period. Absent the
reporting changes noted in Note 1, LTM total active annual
subscribers would have been 135 thousand, up 66% year on
year.4 A count of the number of paid downloads by our
customers in the reporting period. Excludes downloads from
Editorial Subscriptions, Editorial feeds and certain API structured
deals, including bulk unlimited deals. Excludes downloads starting
in Q3’22 tied to a two-year deal signed with Amazon in July 2022,
as the magnitude of the potential download volume over the deal
term could result in significant fluctuations in this metric
without corresponding impact to revenue in the same
period.5 This calculates retention of total revenue for
customers on an annual subscription product, comparing the
customer’s total billed revenue (inclusive of both annual
subscription and non-annual subscription products) in the LTM
period to the prior LTM period. Absent the reporting changes
noted in Note 1 above, LTM annual subscriber retention rate would
have been 99.0%. 6 A count of the total images and videos
in our content library as of the reporting date.7 A measure of the
percentage of total paid customer downloaders who are video
downloaders. The underlying calculation of this metric was changed
vs. previously reported metrics. This change was made to exclude
the impact of downloader activity from our free trial subscriptions
which are skewed entirely to stills-only content.8 The Company
launched Unsplash+ during the three months ended December 31, 2022.
This new Unsplash subscription will now be included within these
KPI’s from the launch date forward. The impact is not yet
material.
First Quarter 2023 Business Highlights:
- Announced collaboration with NVIDIA to develop and distribute
responsible generative text-to-image and text-to-video offerings.
The collaboration will see Getty Images and NVIDIA working to
commercialize responsible AI models to bring new capabilities to
their collective customers.
- Announced exclusive, multi-year global partnerships with Sky
News and Anadolu to represent their world-class quality
footage.
- In partnership with AI visual tools developer BRIA, deployed
one-click background removal functionality to iStock subscribers,
allowing customers to get to the exact image they need with
increased time and budget efficiency.
Financial Outlook for Full Year 2023
The following tables summarize Getty Images
fiscal year 2023 guidance:
|
2023 Guidance |
Revenue |
$936 million to $963 million |
Revenue Growth YoY |
1.0% to 4.0% |
Revenue Growth, Currency Neutral |
1.5% to 4.5% |
Adjusted EBITDA |
$305 million to $315 million |
Adjusted EBITDA Growth YoY |
0.4% to 3.6% |
Adjusted EBITDA Growth, Currency Neutral |
0.7% to 4.0% |
|
|
Currency neutral growth rates have been updated to remain
aligned with Revenue and adjusted EBITDA guidance, which remain
unchanged both on a dollar and year over year growth basis.
Assuming foreign currency rates remain at current levels, the
guidance includes the following impacts from FX on revenue and
EBITDA:
|
FX Headwind |
FX Tailwind |
FX Headwind |
|
Q1 2023 |
Q2 2023 |
2H 2023 |
2023 |
Revenue |
($7.6) million |
(~$3.5) million |
~$6.0 million, primarily in Q4 |
(~$5.0) million |
Adjusted EBITDA |
($3.2) million |
(~$1.0) million |
~$3.0 million, primarily in Q4 |
(~$1.0) million |
|
|
|
|
|
Webcast & Conference Call Information
The Company will host a conference call and live
webcast with the investment community at 5:00 p.m. Eastern Time
today, Thursday, May 11, 2023, to discuss its first quarter 2023
results. The live webcast will be accessible through the Investor
Relations section of the Company’s website at
https://investors.gettyimages.com/. To access the call through a
conference line, dial 1‑877‑407‑0792 (in the U.S.) or
1‑201‑689‑8263 (international callers). A replay of the conference
call will be posted shortly after the call and will be available
for fourteen days following the call. To access the replay, dial
1‑844‑512‑2921 (in the U.S.) or 1‑412‑317‑6671 (international
callers). The access code for the replay is 13738187.
About Getty Images
Getty Images (NYSE: GETY) is a preeminent global visual content
creator and marketplace that offers a full range of content
solutions to meet the needs of any customer around the globe, no
matter their size. Through its Getty Images, iStock and Unsplash
brands, websites and APIs, Getty Images serves customers in almost
every country in the world and is the first-place people turn to
discover, purchase and share powerful visual content from the
world’s best photographers and videographers. Getty Images works
with over 527,000 contributors and more than 310 content partners
to deliver this powerful and comprehensive content. Each year Getty
Images covers more than 160,000 news, sport and entertainment
events providing depth and breadth of coverage that is unmatched.
Getty Images maintains one of the largest and best privately-owned
photographic archives in the world with millions of images dating
back to the beginning of photography.
For company news and announcements, visit our Newsroom.
Forward-Looking Statements
Certain statements included in this press
release that are not historical facts are forward-looking
statements for purposes of the safe harbor provisions under the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of the
words such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “forecast,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook,” “target” or similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. These forward-looking statements include, but
are not limited to, statements regarding estimates and forecasts of
other financial and performance metrics and projections of market
opportunity. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of our management and are not predictions of actual
performance. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as, and
must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of the Company.
These forward-looking statements are subject to
a number of risks and uncertainties, including: our inability to
continue to license third-party content and offer relevant quality
and diversity of content to satisfy customer needs; our ability to
attract new customers and retain and motivate an increase in
spending by its existing customers; the user experience of our
customers on our websites; the extent to which we are able to
maintain and expand the breadth and quality of our content library
through content licensed from third-party suppliers, content
acquisitions and imagery captured by its staff of inhouse
photographers; the mix of and basis upon which we license our
content, including the price-points at, and the license models and
purchase options through, which we license our content; the risk
that we operate in a highly competitive market; the risk that we
are unable to successfully execute our business strategy or
effectively manage costs; our inability to effectively manage our
growth; our inability to maintain an effective system of internal
controls and financial reporting; the risk that we may lose the
right to use “Getty Images” trademarks; our inability to evaluate
our future prospects and challenges due to evolving markets and
customers’ industries; the legal, social and ethical issues
relating to the use of new and evolving technologies, such as
Artificial Intelligence; the risk that our operations in and
continued expansion into international markets bring additional
business, political, regulatory, operational, financial and
economic risks; our inability to adequately adapt our technology
systems to ingest and deliver sufficient new content; the risk of
technological interruptions or cybersecurity vulnerabilities; the
inability to expand our operations into new products, services and
technologies and to increase customer and supplier awareness of new
and emerging products and services; the loss of and inability to
attract and retain key personnel that could negatively impact our
business growth; the inability to protect the proprietary
information of customers and networks against security breaches and
protect and enforce intellectual property rights; our reliance on
third parties; the risks related to our use of independent
contractors; the risk that an increase in government regulation of
the industries and markets in which we operate could negatively
impact our business; the impact of worldwide and regional
political, military or economic conditions, including declines in
foreign currencies in relation to the value of the U.S. dollar,
hyperinflation, higher interest rates, devaluation the impact of
recent bank failures on the marketplace and the ability to access
credit and significant political or civil disturbances in
international markets where we conduct business; the risk that
claims, lawsuits and other proceedings that have been, or may be,
instituted against us or our predecessors could adversely affect
our business; the inability to maintain the listing of our Class A
common stock on the New York Stock Exchange; volatility in our
stock price and in the liquidity of the trading market for our
Class A Common Stock; the risk that the COVID-19 pandemic and
efforts to reduce its spread impacts our business, financial
condition, cash flows and operation results more significantly than
currently expected; changes in applicable laws or regulations; the
risks associated with evolving corporate governance and public
disclosure requirements; the risk of greater than anticipated tax
liabilities; the risks associated with the storage and use of
personally identifiable information; earnings-related risks such as
those associated with late payments, goodwill or other intangible
assets; our ability to obtain additional capital on commercially
reasonable terms; the risks associated with being an “emerging
growth company” within the meaning of the Securities Act of 1933,
as amended; risks associated with our reliance on information
technology in critical areas of our operations; our inability to
pay dividends for the foreseeable future; the risks associated with
additional issuances of Class A Common Stock without stockholder
approval; costs related to operating as a public company; and those
factors discussed under the heading “Item 1.A. Risk Factors” of our
most recently filed Annual Report on Form 10-K. If any of these
risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements.
These and other factors that could cause actual
results to differ from those implied by the forward-looking
statements in this press release are more fully described under the
heading “Item 1.A. Risk Factors” in our most recently filed Annual
Report on Form 10-K and in our other filings with the SEC. The
risks described under the heading “Item 1.A. Risk Factors” in our
most recently filed Annual Report on Form 10-K are not exhaustive.
New risk factors emerge from time to time and it is not possible to
predict all such risk factors, nor can we assess the impact of all
such risk factors on our business or the extent to which any factor
or combination of factors may cause actual results to differ
materially from those contained in any forward-looking statements.
All forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by the
foregoing cautionary statements. We undertake no obligations to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
In addition, the statements of belief and
similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based upon information available to
us, as applicable, as of the date of this press release, and while
we believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain and
you are cautioned not to unduly rely upon these statements.
|
GETTY IMAGES HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except share and per share
amounts) |
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
REVENUE |
$ |
235,642 |
|
|
$ |
230,978 |
|
|
|
|
|
OPERATING EXPENSE: |
|
|
|
Cost of revenue (exclusive of
depreciation and amortization shown separately below) |
$ |
63,286 |
|
|
$ |
61,894 |
|
Selling, general and
administrative expenses |
|
102,395 |
|
|
|
93,153 |
|
Depreciation |
|
13,023 |
|
|
|
12,512 |
|
Amortization |
|
7,207 |
|
|
|
12,205 |
|
Other operating expense –
net |
|
279 |
|
|
|
2,706 |
|
Operating expense |
|
186,190 |
|
|
|
182,470 |
|
INCOME FROM OPERATIONS |
|
49,452 |
|
|
|
48,508 |
|
|
|
|
|
OTHER EXPENSE, NET: |
|
|
|
Interest expense |
|
(30,497 |
) |
|
|
(29,600 |
) |
(Loss) gain on fair value
adjustment for swaps and foreign currency exchange contract –
net |
|
(2,085 |
) |
|
|
12,126 |
|
Unrealized foreign exchange
(loss) gains – net |
|
(10,922 |
) |
|
|
7,043 |
|
Other non-operating expense –
net |
|
488 |
|
|
|
157 |
|
|
|
|
|
Total other expense – net |
|
(43,016 |
) |
|
|
(10,274 |
) |
INCOME BEFORE INCOME
TAXES |
|
6,436 |
|
|
|
38,234 |
|
INCOME TAX EXPENSE |
|
(3,233 |
) |
|
|
(13,127 |
) |
|
|
|
|
NET INCOME |
|
3,203 |
|
|
|
25,107 |
|
Less: |
|
|
|
Net income attributable to
noncontrolling interest |
|
507 |
|
|
|
208 |
|
Redeemable Preferred Stock
dividend |
|
— |
|
|
|
18,847 |
|
NET INCOME ATTRIBUTABLE TO
GETTY IMAGES HOLDINGS, INC. |
$ |
2,696 |
|
|
$ |
6,052 |
|
|
|
|
|
Net income per share
attributable to Class A Getty Images Holdings, Inc. common
stockholders: |
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.03 |
|
Diluted |
$ |
0.01 |
|
|
$ |
0.03 |
|
|
|
|
|
Weighted-average Class A
common shares outstanding: |
|
|
|
Basic |
|
395,307,317 |
|
|
|
196,103,962 |
|
Diluted |
|
408,640,904 |
|
|
|
221,527,576 |
|
|
|
|
|
|
|
|
|
GETTY IMAGES HOLDINGS, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands, except share and par value
data) |
|
|
March 31,2023 |
|
December 31,2022 |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
116,820 |
|
|
$ |
97,912 |
|
Restricted cash |
|
4,458 |
|
|
|
4,482 |
|
Accounts receivable – net of allowance of $6,817 and $6,460,
respectively |
|
135,200 |
|
|
|
129,603 |
|
Prepaid expenses |
|
15,180 |
|
|
|
15,728 |
|
Taxes receivable |
|
11,542 |
|
|
|
11,297 |
|
Other current assets |
|
14,185 |
|
|
|
10,497 |
|
Total current assets |
|
297,385 |
|
|
|
269,519 |
|
PROPERTY AND EQUIPMENT –
NET |
|
175,952 |
|
|
|
172,083 |
|
RIGHT OF USE ASSETS |
|
45,353 |
|
|
|
47,231 |
|
GOODWILL |
|
1,499,889 |
|
|
|
1,499,578 |
|
IDENTIFIABLE INTANGIBLE ASSETS
– NET |
|
416,945 |
|
|
|
419,548 |
|
DEFERRED INCOME TAXES –
NET |
|
8,328 |
|
|
|
8,272 |
|
OTHER LONG-TERM ASSETS |
|
43,253 |
|
|
|
51,952 |
|
TOTAL |
$ |
2,487,105 |
|
|
$ |
2,468,183 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
90,303 |
|
|
$ |
93,766 |
|
Accrued expenses |
|
36,537 |
|
|
|
49,327 |
|
Income taxes payable |
|
13,274 |
|
|
|
8,031 |
|
Deferred revenue |
|
179,522 |
|
|
|
171,371 |
|
Total current liabilities |
|
319,636 |
|
|
|
322,495 |
|
LONG-TERM DEBT – NET |
|
1,436,674 |
|
|
|
1,428,847 |
|
LEASE LIABILITIES |
|
44,363 |
|
|
|
46,218 |
|
DEFERRED INCOME TAXES –
NET |
|
31,458 |
|
|
|
37,075 |
|
UNCERTAIN TAX POSITIONS |
|
37,407 |
|
|
|
37,333 |
|
OTHER LONG-TERM
LIABILITIES |
|
3,457 |
|
|
|
3,167 |
|
Total liabilities |
|
1,872,995 |
|
|
|
1,875,135 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
Class A common stock, $0.0001 par value: 2.0 billion shares
authorized; 396.9 million shares issued and outstanding as of
March 31, 2023 and 394.8 million shares issued and outstanding
as of December 31, 2022 |
|
39 |
|
|
|
39 |
|
Additional paid-in capital |
|
1,945,803 |
|
|
|
1,936,324 |
|
Accumulated deficit |
|
(1,279,658 |
) |
|
|
(1,282,354 |
) |
Accumulated other comprehensive loss |
|
(100,548 |
) |
|
|
(108,928 |
) |
Total Getty Images Holdings, Inc. stockholders’ equity |
|
565,636 |
|
|
|
545,081 |
|
Noncontrolling interest |
|
48,474 |
|
|
|
47,967 |
|
Total stockholders’ equity |
|
614,110 |
|
|
|
593,048 |
|
TOTAL |
$ |
2,487,105 |
|
|
$ |
2,468,183 |
|
|
|
|
|
|
|
|
|
GETTY IMAGES HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net income |
$ |
3,203 |
|
|
$ |
25,107 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
|
13,023 |
|
|
|
12,512 |
|
Amortization |
|
7,207 |
|
|
|
12,205 |
|
Unrealized exchange loss (gains) on foreign denominated debt |
|
9,489 |
|
|
|
(5,582 |
) |
Equity-based compensation |
|
6,132 |
|
|
|
1,741 |
|
Deferred income taxes – net |
|
(40 |
) |
|
|
7,219 |
|
Uncertain tax positions |
|
1,222 |
|
|
|
1,143 |
|
Non-cash fair value adjustment for swaps and foreign currency
exchange contracts |
|
2,085 |
|
|
|
(11,742 |
) |
Amortization of debt issuance costs |
|
1,031 |
|
|
|
1,495 |
|
Non-cash operating lease costs |
|
1,878 |
|
|
|
2,516 |
|
Impairment of right of use assets |
|
— |
|
|
|
2,563 |
|
Other |
|
723 |
|
|
|
1,567 |
|
Changes in current assets and liabilities: |
|
|
|
Accounts receivable |
|
(5,721 |
) |
|
|
11,366 |
|
Accounts payable |
|
657 |
|
|
|
5,294 |
|
Accrued expenses |
|
(5,079 |
) |
|
|
(20,624 |
) |
Lease liabilities, non-current |
|
(2,022 |
) |
|
|
(2,992 |
) |
Income taxes receivable/payable |
|
(2,015 |
) |
|
|
2,412 |
|
Interest Payable |
|
(7,573 |
) |
|
|
(948 |
) |
Deferred revenue |
|
7,833 |
|
|
|
5,419 |
|
Other |
|
(118 |
) |
|
|
(1,306 |
) |
Net cash provided by operating
activities |
|
31,915 |
|
|
|
49,365 |
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
Acquisition of property and
equipment |
|
(15,525 |
) |
|
|
(16,235 |
) |
Net cash used in investing
activities |
|
(15,525 |
) |
|
|
(16,235 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Repayment of debt |
|
(2,600 |
) |
|
|
(2,600 |
) |
Proceeds from common stock
issuance |
|
2,639 |
|
|
|
29 |
|
Cash paid for equity issuance
costs |
|
(86 |
) |
|
|
(3,081 |
) |
Net cash used in financing
activities |
|
(47 |
) |
|
|
(5,652 |
) |
|
|
|
|
EFFECTS OF EXCHANGE RATE
FLUCTUATIONS |
|
2,541 |
|
|
|
(3,586 |
) |
NET INCREASE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
18,884 |
|
|
|
23,892 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH – Beginning of period |
|
102,394 |
|
|
|
191,529 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH – End of period |
$ |
121,278 |
|
|
$ |
215,421 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial MeasuresIn
order to assist investors in understanding the core operating
results that our management uses to evaluate the business and for
financial planning, we present the following non-GAAP measures: (1)
Adjusted EBITDA, (2) Adjusted EBITDA Margin, (3) Adjusted EBITDA
less capex and (4) Free Cash Flow. The presentation of this
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with U.S. GAAP.
The Company believes that these measures are
relevant and provide useful information widely used by analysts,
investors and other interested parties in our industry to provide a
baseline for evaluating and comparing our operating performance,
and in the case of free cash flow, our liquidity results. We also
evaluate our revenue on an as reported (U.S. GAAP) and currency
neutral basis. We believe presenting currency neutral information
provides valuable supplemental information regarding our comparable
results, consistent with how we evaluate our performance
internally.
Reconciliations of these non-GAAP measures to
the most comparable GAAP measures are provided below.
The Company does not reconcile its
forward-looking non-GAAP financial measures to the corresponding
U.S. GAAP measures, due to variability and difficulty in making
accurate forecasts and projections and/or certain information not
being ascertainable or accessible; and because not all of the
information, such as foreign currency impacts necessary for a
quantitative reconciliation of these forward-looking non-GAAP
financial measures to the most directly comparable U.S. GAAP
financial measure, is available to the Company without unreasonable
efforts. For the same reasons, the Company is unable to address the
probable significance of the unavailable information. The Company
provides non-GAAP financial measures that it believes will be
achieved, however it cannot accurately predict all of the
components of the adjusted calculations and the U.S. GAAP measures
may be materially different than the non-GAAP measures.
Reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin,
and Adjusted EBITDA less capex |
|
|
|
(in thousands) |
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Net income |
|
$ |
3,203 |
|
|
$ |
25,107 |
|
Add/(less) non-GAAP
adjustments: |
|
|
|
|
Depreciation and
amortization |
|
|
20,230 |
|
|
|
24,717 |
|
Other operating expense -
net |
|
|
279 |
|
|
|
2,706 |
|
Interest expense |
|
|
30,497 |
|
|
|
29,600 |
|
Fair value adjustments,
foreign exchange and other non operating expense (income) 1 |
|
|
12,519 |
|
|
|
(19,326 |
) |
Income tax expense |
|
|
3,233 |
|
|
|
13,127 |
|
Stock based compensation
expense |
|
|
6,132 |
|
|
|
1,741 |
|
Adjusted EBITDA |
|
$ |
76,093 |
|
|
$ |
77,672 |
|
Capex |
|
|
15,525 |
|
|
|
16,235 |
|
Adjusted EBITDA less
capex |
|
$ |
60,568 |
|
|
$ |
61,437 |
|
Net income margin |
|
|
1.4 |
% |
|
|
10.9 |
% |
Adjusted EBITDA Margin |
|
|
32.3 |
% |
|
|
33.6 |
% |
Adjusted EBITDA less capex
margin |
|
|
25.7 |
% |
|
|
26.6 |
% |
|
|
|
|
|
|
|
|
|
(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 Free Cash Flow |
(in millions) |
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
31.9 |
|
|
$ |
49.4 |
|
Acquisition of
property and equipment |
|
|
(15.5 |
) |
|
|
(16.2 |
) |
Free Cash
Flow |
|
$ |
16.4 |
|
|
$ |
33.1 |
|
|
|
|
|
|
|
|
|
|
OTHER FINANCIAL DATA
Revenue
by Product |
|
(In thousands) |
|
Three Months Ended March 31, |
|
increase / (decrease) |
|
|
2023 |
|
% of revenue |
|
2022 |
|
% of revenue |
|
$ change |
|
% change |
|
CN % change |
Creative |
|
|
146,497 |
|
62.2 |
% |
|
|
148,398 |
|
64.2 |
% |
|
|
(1,901 |
) |
|
(1.3 |
)% |
|
1.9 |
% |
Editorial |
|
|
84,625 |
|
35.9 |
% |
|
|
78,753 |
|
34.1 |
% |
|
|
5,872 |
|
|
7.5 |
% |
|
11.3 |
% |
Other |
|
|
4,520 |
|
1.9 |
% |
|
|
3,827 |
|
1.7 |
% |
|
|
693 |
|
|
18.1 |
% |
|
22.4 |
% |
Total
revenue |
|
$ |
235,642 |
|
100.0 |
% |
|
$ |
230,978 |
|
100.0 |
% |
|
$ |
4,664 |
|
|
2.0 |
% |
|
5.5 |
% |
Balance
Sheet & Liquidity |
|
($ millions) |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|
Mar 31, 2022 |
Cash & Cash Equivalents1 |
|
$116.8 |
|
$97.9 |
|
$210.8 |
Available under Revolving
Credit Facility2 |
|
$80.0 |
|
$80.0 |
|
$80.0 |
Liquidity |
|
$196.8 |
|
$177.9 |
|
$290.8 |
Term Loans Outstanding - USD
Tranche |
|
$684.8 |
|
$687.4 |
|
$995.2 |
Term Loans Outstanding - EUR
Tranche3 |
|
$456.5 |
|
$447.0 |
|
$468.2 |
Total Balance - Term Loans
Outstanding4 |
|
$1,141.3 |
|
$1,134.4 |
|
$1,463.4 |
Senior Notes |
|
$300.0 |
|
$300.0 |
|
$300.0 |
|
|
|
|
|
|
|
1 Excludes restricted cash of $4.5 million as of March 2023,
$4.5 million as of December 2022, $4.6 million as of March 2022. 2
Effective February 2019. On May 4, 2023, the Company entered into
an amendment to the existing facility, which upsized the facility
to $150 million and extended the maturity to May 4, 2028. The
facility remains undrawn.3 Face Value of Debt is 419M EUR.
Converted using the FX spot rate as of March 31, 2023 of 1.09,
December 31, 2022 of 1.07, and March 31, 2022 of 1.12.4 Represents
face value of debt, not GAAP carrying value.
Investor Contact:Getty
ImagesSteven KannerInvestorrelations@gettyimages.com
Media Contacts:Getty ImagesAnne
FlanaganAnne.flanagan@gettyimages.com
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