Q4 2023 Getty Images Holdings Inc Earnings Call

Operator: Good afternoon, and welcome to Getty Images' fourth quarter and full year 2023, Ernie Totten. Today's call is being recorded.

Good afternoon, and welcome to Getty images fourth quarter and full year 2020 earnings conference call.

Today's call is being recorded.

Operator: We have allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Steven Kanner, Vice President of Regulations and Treasury at Getty Images. Thank you. You may begin. Good afternoon.

We have allocated one hour for prepared remarks, and Q&A at this time I'd like to turn the conference over to Steven Kent, Vice President of congratulations and Treasury at Getty and Becky.

Thank you you may begin.

Good afternoon.

Steven Kanner: And welcome to the Getty Images fourth quarter and full year 2023 earnings call. Joining me on today's call are Craig Peters, Chief Executive Officer, and Jen Leyden, Chief Financial Officer. Before we begin, we would like to remind you that this call will include forward-looking statements within the meaning of the Private Security Reform Act of 1995. These statements are subject to various risks, uncertainties, and assumptions, which could cause our actual results to differ materially from those projected.

And welcome to the Getty images fourth quarter and full year 2023 earnings call.

Joining me on today's call are correct Peters Chief Executive Officer.

And Jen Leighton Chief Financial Officer.

Before we begin we would like to remind you that this call will include forward looking statements within the meaning of the private securities.

Reform Act of 1995.

Payments are subject to various risks uncertainties and assumptions.

Which could cause our actual results to differ materially from these statements.

Steven Kanner: These risks, uncertainties, and assumptions are highlighted in the forward-looking statement section of today's press release and in our filings with the SEC. Links to these filings and today's press release can be found on our Investor Relations website at investors.gettyimages.com. During our call today, we will also reference certain non-GAAP financial information, including Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA less CapEx and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe they represent our operational performance and underlying results of our business. Reconciliations of GAAP to non-GAAP measures, as well as the description, limitations, and rationale for using each measure, can be found in our filings with the SEC.

These risks uncertainties and assumptions are highlighted in the forward looking statements section of today's press release and in our filings with the SEC.

Links to these filings and today's press release can be found on our Investor Relations website at investors stop Getty images dotcom.

During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA adjusted EBITDA margin.

The EBITDA less capex and free cash flow.

We use non-GAAP measures and some of our financial discussions as.

We believe they represent our operational performance and underlying results of our business.

Because filiation of GAAP to non-GAAP measures as well as the description limitations and rationale for using each measure can be found in our filings with the SEC.

Craig Peters: After our prepared remarks, we'll open the call for your questions. With that, I will hand the call over to our Chief Executive Officer, Craig Peters. Thanks, Steven.

After our prepared remarks, we'll open the call for your questions.

With that I will.

Turning the call over to our Chief Executive Officer, Greg Peters.

Yeah.

Thanks, Steven and thanks to everyone for joining Getty images fourth quarter and full year 2023 earnings call.

Craig Peters: And thanks to everyone for joining Getty Images' fourth quarter and full year 2023 learnings fall. I'll start by addressing the full year business performance in progress before Jen takes you through the fourth quarter financial results and 2024 outlook. Throughout 2023, we experienced a series of challenges across our business; in Europe, across our agency customers, and within certain technology sectors, we observed a cautious approach to customer spending given prevailing macroeconomic conditions. Additionally, starting in the second quarter, the writers and actors strike significantly impacted our media and entertainment businesses. The strengthening of the US dollar relative to foreign currencies also negatively impacted our EBITDA, as we have a significant share of revenue outside the US with These challenges were not unique to us, and despite their impacts, Getty Images remained relatively resilient as we adapted to mitigate them.

I'll start by addressing the full year business performance and progress before John takes you through the fourth quarter financial results and 2020 for outlook.

Throughout 2023, we experienced a series of challenges across our business landscape.

In Europe.

Across our agency customers and within certain technology sectors, we observed a cautious approach and customer spending given prevailing macro economic conditions.

Additionally, starting in the second quarter, the writers and actors strike significantly impacted our media and entertainment segments.

The strengthening of the U S dollar relative to foreign currencies also negatively impacted our EBITDA as we have a significant share of revenue outside the U S with a smaller cost base in these currencies.

These challenges were not unique to us and despite their impacts Getty images remained relatively resilient as we adapted to mitigate the impacts.

Craig Peters: For the full year 2023, revenue was $916.6 million, representing a year-on-year decrease of 1% reported and down 0.5% on a new currency basis. Consistent with our history and our culture, the company adopted prudent cost measures measures without sacrificing our investment in a long term. As a result, adjusted EBITDA came in at just over $301.4 million for the full year, down 1.2% reported and down 0.4% on a currency The Getty Images team continued to lay a strong foundation grounded in our core value propositions of helping our customers create at a higher level and saving our customers time and money. That foundation starts with our exclusive content, one of the key differentiators for Getty Images; content from over 80,000 creators and 300 partners represented exclusively by Getty Images. This translates to unique event access and rights, resulting in an unmatched archive and truly distinct quality.

For the full year 2023 revenue was $916 $6 million.

Representing a year on year decrease of 1% reported and down 5% on a currency neutral basis.

Consistent with our history and our culture the company adopted prudent cost measure measures without sacrificing our investment in the long term as.

As a result, adjusted EBITDA came in at just over 301 4 million for the full year down one 2% reported and down 4% on a currency neutral basis, holding steady at 32, 9% of revenue.

Despite a tough climate and results below the expectations, we had going into 2023.

The Getty images team continued to lay a strong foundation grounded in our core value propositions of helping our customers create at a higher level saving our customers time and money and eliminating risks.

That foundation starts with it our exclusive content is one of the key differentiators for Getty images content from over 80000 creators and 300 partners represented exclusively by Getty images.

This translates to unique access and rates.

Translates to an unmatched archive and truly distinct quality.

Craig Peters: It translates to iStock being the only meaningful mid-tier provider to offer an exclusive, elevated quality level through its signature collection of more than $31 million in a long-standing world of seemingly infinite supply of visual content. Getty Images has always put quality first, and that is reflected by approximately two-thirds of our revenue being generated by content that customers can simply not get any statistics that have been durable. We successfully renewed each and every content partnership up for renewal within the year. This includes multi-year renewals with Paris Match, Anadolu, Sky News, Sony Pictures, and the DPA Picture Alliance.

It translates to ice stock being the only meaningful mid tier provider offering exclusive elevated quality level.

If you're a collection of more than 31 million assets.

And our longstanding world seemingly infinite supply visual content Getty images as always split apart on quality and that is reflected by approximately two thirds of our revenue being generated by content that customers can simply not get anywhere else.

That has been durable over time.

We successfully renewed each and every content partnership up renewable within the year. This includes multiyear than yours with parents match and a dollar of Sky News, Sony Pictures and the DPA Picture Alliance.

Craig Peters: We also added new content and rights through partnerships with the U.S. Soccer Federation and College Football Playoffs, to name just a couple. Through our staff, our partners, and our contributors, we've produced award-winning, extensive editorial coverage across the globe, representing more than 160,000 events from over 170 countries, including events such as the conflicts in Ukraine and Gaza. Earthquakes, storms, the U.S.-Mexico border, all things Taylor Swift, Beyonce's Renaissance World Tour, the Women's World Cup, the PGA Tour, Formula One, the Rugby World Cup, the Sundance Film Festival, and the Met Gala.

We also added new content rights and partnerships with the U S Soccer Federation and college football playoff to name just a couple.

No our staff our partners and our contributors that produced a warm winning.

Tentative editorial coverage across the globe, representing more than a 160000 events.

170 countries.

Such as the conflict in Ukraine, and gather lots of Israel.

Earthquakes storms U S Mexico border all things Taylor Swift nuances Renaissance World Tour, the Women's World Cup, the PGA tour Formula one.

Rugby World Cup Sundance Film Festival, and the met Gala I could go on.

Craig Peters: I could go on, citing our archives in support of important stories, stories such as the coronation of King Charles III. 60th anniversary of the March on Washington, celebrating the lives of Tina Turner, Matthew Perry, and Harry Belafonte, and the all-important build-up to the Paris 2024 Olympic and Paralympic Games. We conducted and conveyed deep research on societal and digital trends, enabling our customers to more effectively and deeply engage their targeted end audiences across the globe. Research around women in sport sustainability, customer sentiment around AI, mental health, ageism We introduced natural language search on the Getty Images and iStock websites, enabling our customers to more deeply search our content and more efficiently find the content to meet their needs.

Remind our archives and support.

Sorry stories, such as the coordination of King Charles the third.

16th anniversary the March on Washington image and celebrating the lives Athena tenure, Mathew Perry and Harry Belafonte.

And the all important buildup to the Paris, 2024 Olympic and Paralympic games.

We conducted an conveyed deep research on societal and digital trends, enabling our customers to more effectively and deeply engaged their targeted audiences across the globe.

Research around limited sport sustainability.

Customer sentiment around AI.

It'll help ageism, social media and the global cost of living crisis.

We introduced natural language search on the Getty images and add back websites, enabling our customers more deeply surcharge content more efficiently find the content to meet their needs.

Craig Peters: We continue to invest in the growth of Unsplash Plus, our premium subscription offering on Unsplash, adding exclusive content, new languages, and new features. These efforts are why we maintained our paid downloads at $95 million, despite a challenging macro environment. They are why we were able to increase customer commitment in the face of a challenging environment, with total annual subscribers increasing to 236,000, up from 129,000 to start the year, and subscription as a percentage of total revenue reaching an all-time high of 53.2%. While still early days with respect to adoption and contribution to our business performance, I'd be remiss if I wouldn't have been on Ernie's call where I didn't mention AI In partnership with NVIDIA, we announced and launched a truly unique generative image option, an offering that is trained on licensed and released data and rewards content creators for the training, and an offering that respects third-party intellectual property rights and is socially responsible, and it cannot produce deep and content that is commercially safe and indemnified, and an offering that produces high-quality output. We launched on Getty Images and via API in Q4, and on i Of course, with all things AI, the piece of innovation is the brain.

We continue to invest in the growth demand supply plus our premium subscription offering announced flash, adding exclusive content languages and new features.

These efforts are why we maintained our paid downloads at 95 million, despite a challenging macro environment.

They are why we are able to increase customer commitment in the face of a challenging environment with total annual subscribers increasing to 236000 up from 129000 to start the year.

And subscription as a percentage of total revenue, reaching an all time high of 53, 2%.

Yeah.

While still early days with respect to adoption and contribution to our business performance I'd be remiss, if I would not be an earnings call, where I didn't mention AI.

In partnership with Nvidia, we announced and launched a truly unique generative image offering an offering that is trained on licensed and release data.

Rewards content creators for the training.

And offering it respects third party intellectual property rights in a socially responsible and that it cannot produce deep fakes.

An offering that is commercially safe and indemnified.

An offering that produces high quality outlets.

We launched on Getty images and via API, and Q4, and a nice stock in January of this year.

Of course, with all things AI piece of innovation is breaking that in.

Craig Peters: In recent weeks, we have already introduced expanded controls and capabilities such as in-painting and out-painting. We'll be releasing a newly trained model soon. And we will also enable AI capabilities across our entire pre-shot creative lab. We also have big plans for video in partnership with NVIDIA and Runway, which we expect to launch later this year, aligned to the commercial needs of our customers. While we continue to face macro challenges, as always, we remain focused on delivering real value to our customers and long-term returns to our shareholders. At the core of Getty Images is high-quality content and coverage that is derived from top-notch talent, exclusive access, extensive research, and rare; we pair this with world-class customer service across committed and long-standing relationships, and the delivery of technology that truly enhances the creativity, productivity, and efficiency of our customers With our solid foundation and clear vision and focus, we're excited to return to growth in 2020. Thank you.

In recent weeks, we have already introduced expanded controls and capabilities such as in painting in our painting will be releasing a newly trained models soon and will also enable AI capabilities across our entire pre shot creative library.

We also have big plans for video in partnership with Nvidia and run rate, which we expect to launch later this year aligned to the commercial needs of our customers.

While we continue to face macro challenges as always we remain focused on delivering real value to our customers and long term returns to our shareholders.

At the core of Getty images as high quality content and coverage that is derived from top notch talent exclusive access extensive research and where expertise with.

We pair this with world class customer service across committed and long standing relationships.

And the delivery of technology that truly enhances the creativity <unk> productivity and efficiency of our customers without risk.

With our solid foundation and clear vision and focus we're excited to return to growth in 2024.

Thank you and now turning the call over to Jen to take you through the more detailed financials.

As Craig mentioned, our performance in the fourth quarter and for the full year F. 'twenty 'twenty reflected the impact of the various challenges we face but also the proactive.

Jennifer Leyden: And now turning the call over to Jen to take you through the more detailed financials. As Craig mentioned, our performance in the fourth quarter and for the full year of 2023 reflected the impacts of the various challenges but also the proactive actions taken by the company to protect its bottom line and position us for a return to top-line growth in 2024. I'll start by touching on some of our KPIs, and I'll note that today's press release contains information on all seven of our KPIs, which are reported on a trailing 12-month basis, or the LTM period ended December 31st, 2023, with comparisons to the LTM period ended December 31st, 2022. Total purchasing customers were 799,000, down from 835,000 in the comparable LTM.

<unk> taken by the company to protect its bottom line and position us for a return to topline growth in 2024.

I'll start by touching on some of our Kpis.

This press release.

Pardon me.

And all seven of our Kpis, which are reported on a trailing 12 month basis. Our LTM period ended December 31st 2023.

The comparison to the LTM period ended December 31st 2022.

Hello, purchasing customers were 799000 down from 835000, and the comparable LTM period.

This decrease is tied to both our continued shift into subscription products and the continued contraction in our agency business, where customers can see nearly entirely on an ala carte or transactional basis.

The continued shift to subscription while driving the volume purchasers.

Jennifer Leyden: This decrease is tied to both our continued shift into subscription products and the continued contraction in our agency, where customers consume nearly entirely on an a la carte or transactional basis. The continued shift into subscriptions, while driving the volume of purchasers, has more importantly driven an increase in annual revenue for purchasing customers up from $1,109 to $1,147 for the LTM period. Active annual subscribers grew 83% year-on-year to 236,000, up from 129,000 in 2022, driven primarily by growth of our e-commerce subscriptions, including our iStock Annual and Unsplash Plus subscriptions. This represents the fifth consecutive quarter with growth well in excess of 50%. While that growth rate is a strong metric on its own, the drivers of the growth, largely new customers and customers in our growth markets, as well as in our core markets, are even more compelling for us. In fact, of the 236,000 annual subscribers in the LTM period, 62% were brand new customers to Getty Images, and 38% were customers in our growth markets across LATAM, APAC, and EMEA.

That's more important driven an increase in annual revenue per purchasing customer up from 1109 to 1147 for the LTM period.

Active annual subscribers grew 83% year on year to 236000 up.

From 129 in 2020.

Driven primarily by growth of our e-commerce subscription, including our I thought.

Last plus subscription.

This represents the fifth consecutive quarter with growth well in excess of 50%.

While that growth rate is a strong metric on a down the drivers of the growth largely new customers and customers in our growth markets as well as in our core markets is even more compelling.

In fact of the 236000 annual subscribers in the LTM period fixed.

Two 2% were brand new customers to Getty images, and 38% were customers in our growth markets across Latam APAC and EMEA, we are expanding our reach.

Our annual subscriber revenue retention rate was 92, 4% down from 100.1% in the 2022 LTM period.

In large part to the lower revenue retention rate on some of our smaller e-commerce subscribers as we'd expect and also a reduction in incremental Ala carte revenue from.

Scrubbers.

Paid download volume was flat at 95 million and as Craig noted that as a very strong outcome given me here yet.

Jennifer Leyden: We are expanding our, Our annual subscriber revenue retention rate was 92.4%, down from 100.1%, in the 2022 LTM period, due in large part to those lower revenue retention rates on some of our smaller e-commerce subscribers, as we'd expect, and also a reduction in incremental a la carte revenues from annual subscribers. Paid download volume was flat at $95 million, and as Craig noted, that is a very strong outcome given the myriad of macroeconomic challenges we navigated through. Our video attachment rate remained in growth, rising to 14.1% from 13.1% in Q4 2022, with plenty of room for continued expansion. Turning to our financial performance, As we expected, this quarter's results were impacted by macroeconomic pressure, impacts from the two Hollywood strikes, and continued pressure on our agency business. However, both revenue and Adjusted EBITDA exceeded the upper end of our guidance.

Brown economic challenges, we navigated through.

Our video attachment rate remained in growth rising to 14, 1% from 13, 1% in Q4 2022 with plenty of room for continued expansion.

Turning to our financial performance.

As we expected this quarter's results were impacted by macroeconomic pressures impacts from the two Hollywood strike and continued pressure on our agency business.

However, both revenue and adjusted EBITDA exceeded the.

Our end of our guidance range.

As we exited the year, we saw strengthening across our corporate sector.

Slight improvement in agency and FX, which had been a challenge for most of the year provided a benefit in the quarter.

Total revenue in the fourth quarter was $225 9 million down 2.4% on a reported basis and 4% on a currency neutral basis.

Included in these results are certain impacts the timing of revenue recognition, which contributed approximately 130 basis points of year on year revenue growth in the quarter.

Jennifer Leyden: As we exited the year, we saw strengthening across our corporate sector, a slight improvement in agency, and FX, which had been a challenge for most of the year, provided a benefit in the quarter. Total revenue in the fourth quarter was $225.9 million, down 2.4% on a reported basis and 4% on a currency-neutral basis. Included in these results are certain impacts of the timing of revenue recognition, which contributed approximately 130 basis points of year-on-year revenue growth in the quarter. Our annual subscription revenue made up 54.5% of total revenue in the fourth quarter, up from 50.2% in Q4 of 2022, and it was 53.2% of total revenue for all of 2023. In total, subscription revenue increased 6% on a reported basis and 4.4% on a currency-neutral basis, driven by games across our premium access and e-commerce offerings. While the mix of annual subscription revenue has been above 50% for the past five quarters, we still have opportunity to drive the mix higher. Creative, which includes skills and video content for commercial use and accounts for approximately two-thirds of our total revenue, was $145.8 million, up 0.5% on a reported basis and down 1% on a currency new trophy basis.

Our annual subscription revenue made up 54, 5% of total revenue in the fourth quarter up from 52% in Q4 of 2022 and it was 53.2% of total revenue for all of 2023.

In total subscription revenue increased 6% on a reported basis and four 4% on a currency neutral basis, driven by gains across our premium access and e-commerce offerings.

While the mix of annual subscription revenue has been above 50% for the past five quarters, we still have opportunity to drive the next higher.

Great US which include skills and video content, both commercially and accounts for approximately two thirds of our total revenue was $145 8 million up 5% on a reported basis and down 1% on a currency neutral basis.

If you were to exclude our more challenged agency business, which sits entirely in creative on a pro forma basis creative revenue wasn't growth on both a reported and currency neutral basis.

This highlights the underlying health of our corporate customer segment.

Well then create as continued strength in our annual subscription up 13, 1% or 11, 6% on a currency neutral basis.

Led by our premium access subscription the largest of our subscription offering.

Our E Commerce business continued to see growth in ice stock annual subscription, which grew by 16% on a reported basis.

And 14, 4% currency neutral, marking the 10th consecutive quarter with double digit growth.

In addition.

Our ice class class subscription one of our newest offerings delivered strong double digit growth.

Where we continue to see pressure within our Ala carte offerings, which are pressured due to three factors a mid single digit decline in our agency business.

The impact of the Hollywood strike last production deployment.

A customer shift towards more committed products.

Lower Ala carte purchases, but growth and higher Rps subscription.

Jennifer Leyden: If you were to exclude our more challenged agency business, which sits entirely in creative, on a pro forma basis, creative revenue was engrossed on both a reported and currency neutral basis, highlighting the underlying health of our corporate customer sector. Within Creative, continued strength in our annual subscriptions was up 13.1% or 11.6% on a currency neutral basis, led by our premium access subscription, the largest of our subscription offers. Our e-commerce business continued to see growth in our iStock annual subscriptions, which grew by 16% on a reported basis and 14.4% currently near true, marking the 10th consecutive quarter with double-digit growth. In addition... Our Unsplash Plus subscription, one of our newest offerings, delivered strong double-digit growth, although we continue to see pressure within our a la carte office. There's pressure due to three factors.

And it's where L, which is one third of our total revenue increased our coverage of global news sports and entertainment events as well as our extensive archive collection of historic images and videos.

<unk> finished the quarter at $75 7 million.

Kris.

Seven 9% year on year, and nine 5% on a currency neutral basis.

Our archive and entertainment verticals were negatively impacted by the slowdown related to the Hollywood strike.

While sport and news, we're also up against challenging 2022 comparison.

Our coverage of the 2022, FIFA World Cup and the 2022 U S midterm elections.

Across our major geographies on a currency neutral basis, we saw a year on year decrease of five 2% in the Americas.

One, 8% in EMEA, and four 4% and APAC.

Revenue less cost of revenue as a percentage of revenue remained consistent and strong at 72, 3% in Q4, compared with 72, 4% in Q4 of 2022.

Total SG&A expense was 101 6 million in Q4 up $6 3 million year on year with our expense rate increasing to 45% of revenue up from 41, 2% last year.

Jennifer Leyden: Mid-Single-Digit Decline in our Agency Business due to the impact of the Hollywood Strikes that left production houses and a customer shift towards more committed products, driving lower a la carte purchases, but growth in higher ARPUs. Editorial, which is one-third of our total revenue, includes our coverage of global news, sports, and entertainment events, as well as our extensive archive collection of historic images, finished the quarter at 75.71, a DECREASE, at 7.9% year-on-year and 9.5% on a currency mutual. Our archive and entertainment verticals were negatively impacted by the slowdown related to the Hollywood strike.

The higher year on year expense was due primarily to $10 5 million of stock based comp related to the vesting of employee equity awards compared with $3 4 million of equity based comp in Q4 of 2022.

For the full year SG&A increased by $26 9 million to 43, 9% of revenue.

45% last year also driven by the increase in stock based compensation.

Excluding stock based compensation SG&A decreased year on year, 9% to $91 1 million in the quarter.

The lower spend as a result of our deliberate Kaufman actions executed early in the year.

As a percentage of revenue SG&A, excluding stock based comp was 43% of revenue up just slightly from 39, 7% of revenue in the prior year due primarily to the decrease in revenue.

Jennifer Leyden: Wall Sport and News was also up against challenging 2022 comparisons, including our coverage of the 2022 FIFA World Cup and the 2022 US Midterm Alignment. Across our major geographies, on a currency-neutral basis, we saw a year-on-year decrease of 5.2% in the Americas. 1.8% in EMEA and 4.4% in, revenue less our cost of revenue as a percentage of revenue remained consistent and strong at 72.3% in Q4 compared with 72.4% in Q4 of 2022. Total SG&A expense was $101.6 million in Q4, up $6.3 million year-on-year, with our expense rate increasing to 45% of revenue, up from 41.2% last year. The higher year-on-year expense was due primarily to $10.5 million of stock-based comp related to the vesting of employee equity awards compared with $3.4 million of equity-based comp in Q4 of 2022. For the full year, SG&A increased by $26.9 million to 43.9% of revenue, up from 40.5% last year, also driven by the increase in stock-based compensation. Excluding stock-based compensation, SG&A decreased year-on-year by 0.9% to $91.1 million in the quarter.

For the full year adjusted SG&A decreased <unk>, 4% to $364 9 million or 39, 8% of revenue compared to 39, 5% of revenue in the prior year.

Adjusted EBITDA was $72 2 million for the quarter down four 5% year over year, and six 5% on a crazy neutral basis.

Our adjusted EBITDA margin was 31, 9% down from 32, 6% in Q4 2022 for.

2023, adjusted EBITDA was 301.4 million down, 1.2% reported and 4% on a currency neutral basis.

Our adjusted EBITDA margin was 32, 9% unchanged from the prior year, demonstrating the continued resiliency of our financial model.

Capex was $15 1 million in Q4 up 1.9 million year over year.

Capex as a percentage of revenue was six 7% compared to five 7% in the prior year period.

Full year, Capex was 57 million or six 2% of revenue down from $59 3 million or six 4% of revenue in 2020 two.

Capex continues to be within our expected range of 5% to 7% of revenue.

Adjusted EBITDA less Capex was 57 million down $5 3 million year over year, representing a decrease of eight 5% or 10, 3% on a currency neutral basis.

Jennifer Leyden: The lower SIN is the result of deliberate cost management actions executed early in the year. As a percentage of revenue, SG&A, excluding stock-based comp, was 40.3% of revenue, up just slightly from 39.7% of revenue in the prior year due primarily to the decrease in revenue. For the full year, adjusted SG&A decreased 0.4% to 364.9%, or 39.8% of revenue compared to 39.5% of revenue in the prior year. Adjusted EBITDA was $72.2 million for the quarter, down 4.5% year-over-year and 6.5% on a currency-neutral basis.

Adjusted EBITDA less Capex margin was 25, 2% in Q4 compared to 26, 9% in Q4 2022.

For the full year adjusted EBITDA less Capex was 244.4 million a decrease of <unk>, 5% reported and an increase of <unk>, 7% currency neutral.

Free cash flow was $18 6 million in Q4, compared with $20 6 million in Q4 of 2022.

The decline in free cash flow was largely driven by lower EBITDA and working capital adjustments related to timing.

Free cash flow is stated net of cash interest expense of $24 2 million in cash taxes paid of $8 9 million in the fourth quarter.

Jennifer Leyden: Our adjusted EBITDA margin was 31.9%, down from 32.6% in Q4 2022. For 2023, adjusted EBITDA was $301.4 million, down 1.2% reported and 0.4% on a currency-neutral basis. Our adjusted even and margin was 32.9%, unchanged from the prior year, demonstrating the continued resiliency of our financial model. CapEx was $15.1 million in Q4, up $1.9 million year over year.

For the full year, we generated $75 7 million in free cash flow compared to $103 8 million in 2022 with that full year decrease primarily being a result of the increase in interest expense related to the rise in interest rates and also driven by higher litigation related expense.

Yes.

We finished the quarter with $136 6 million of balance sheet cash of $23 1 million in the third quarter and up $38 7 million from Q4 of 2022 despite.

Jennifer Leyden: CapEx as a percentage of revenue was 6.7% compared to 5.7% in the prior year period. For the full year, CapEx was $57 million, or 6.2% of revenue, down from $59.3 million, or 6.4% of revenue in 2022. TopX continues to be within our expected range of 5% to 7% of revenue. Adjusted EBITDA less CAPEX was $57,000, down 5.3 million year-over-year, representing a decrease of 8.5% or 10.3% on a currency neutral basis. Adjusted even or less capex margin was 25.2% in Q4 compared to 26.9% in Q4 of 2022. For the full year, adjusted EBITDA less CapEx was $244.4 million, a decrease of 0.5% reported and an increase of 0.7% currency neutral. Free cash flow was $18.6 million in Q4, compared with $20.6 million in Q4 of 2022. The decline in keep-free cash flow was largely driven by lower EBITDA and working capital adjustments related to that.

Despite the tough climate. This business continues to generate healthy cash flow continues to pay down debt and we finished the year with higher cash balances and expand our liquidity.

As of December 31st we had total debt outstanding of $1 4 billion, including $300 million of 975% senior notes.

$637 million of U S. D term loan with an applicable interest rate of $9 95 per cent.

$463 6 million of Euro term loan converted using exchange rates as of December 31st 2023.

Within applicable rate at 8.8, 75%.

We also have a $150 million revolver that remains undrawn.

For the full year, we applied to $54 million towards debt pay downs, including a voluntary $2 6 million repayment in the fourth quarter.

We ended the quarter with a net leverage of four two times down from four four times at year end 2022.

In early February we Opportunistically export a debt refinancing with a primary goal of meaningfully reducing our interest expense and extending our term loan maturities.

We analyze the opportunity with our advisors, we ultimately decided against of course eating at the interest expense savings were not as meaningful as desired.

Jennifer Leyden: Free cash flow is stated net of cash interest expense of $24.2 million and cash taxes paid of $8.9 million in the fourth quarter. For the full year, we generated $75.7 million in free cash flow compared to $103.8 million in 2022, with that full year decrease primarily being a result of the increase in interest expense related to the rise in interest rates and also driven by higher litigation-related expenses. We finished the quarter with $136.6 million of balance sheet cash, up $23.1 million from the third quarter and up $38.7 million from Q4 of 2022. Despite the tough climate, this business continues to generate healthy cash flow, and it continues to pay down debt, and we finished the year with higher cash balances and expanded liquidity.

We would like to think that it isn't the lender community as I spent time with us during this process.

We will remain disciplined and we continue to look for the optimal opportunity and market conditions to refinance our debt.

In the meantime, we will continue to deploy our capital to what we believe the highest and best use with a continued focus on reducing our leverage.

Management remain laser focused on execution.

As of December 1st 2023, taking into consideration the foreign exchange rates and applicable interest rates on our debt balance at that time and the effect of 355 million in interest rate swap agreements, which matured in February our annualized estimated cash interest.

Expense is $134 million.

That said, our actual annual interest expense remains subject to changes in the interest rate environment, which we outlined in more detail in our SEC filings.

So we finished 2023, having delivered meaningful subscriber growth.

We continue to pay down our debt, we expanded our AI generally they are offering and we nimbly navigated through several unexpected macro challenges.

Jennifer Leyden: As of December 31st, we had total debt outstanding of $1.4 billion, including $300 million of 9.75% senior notes, $637 million of USD term loans, with an applicable interest rate of $9.95%, and 463.6 million of euro term loans converted using exchange rates as of December 31st, 2023 with an applicable rate of 8.875 percent. We also have a $150 million revolver that remains undrawn. For the full year, we applied $50.4 million toward debt paydowns, including a voluntary $2.6 million repayment in the fourth quarter.

All throughout we remain fiscally disciplined we generated healthy levels of free cash flow and we ended the year with a stronger balance sheet and we are very well positioned to return to topline growth as we head into 2024.

With that let's shift into our 'twenty 'twenty four guidance.

We anticipate revenue of 928 million to 947 million representing growth of one 3% to three 3% year on year and currency neutral growth of 1% to 3%.

Assuming current FX rates hold with the euro above 1.9, and the G. D. P above one point to seven we expect foreign currency to have a more muted impact on our financial result relative to what we experienced in 2023.

Jennifer Leyden: We ended the quarter with a net leverage of 4.2 times, down from 4.4 times at year-end 2022. In early February, we opportunistically explored a debt refinancing with the primary goal of meaningfully reducing our interest expense and extending our term loan maturity. However, as we analyzed the opportunity with our advisors, we ultimately decided against proceeding as the interest expense savings were not as meaningful as we desired.

For revenue, we estimate a benefit of about $2 5 million for the year of which approximately 2 million is expected in the fourth quarter.

We expect adjusted EBITDA of 298 million down 1.5% year over year and down one 2% currency neutral.

Included in the adjusted EBITDA expectation, it's a similar cadence for FX with an approximate estimated 1 million benefit in 2024 with almost all of that expected in the fourth quarter.

Jennifer Leyden: We would like to thank those in the lender community that spent time with us during this process. We will remain disciplined, and we continue to look for the optimal opportunity and market conditions to refinance our debt. In the meantime, we will continue to deploy our capital to what we believe is its highest and best use, with a continued focus on reducing our leverage. Management remains laser focused on execution.

With that operator, please open the call for questions.

Thank you.

At this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from Q for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

And one moment, please while we poll for questions.

Jennifer Leyden: As of December 1, 2023, taking into consideration the foreign exchange rates and applicable interest rates on our debt balance at that time and the effect of $355 million in interest rate swap agreements, which matured in February, our annualized estimated cash interest expense is $134 million. That said, our actual annual interest expense remains subject to changes in the interest rate environment, which we outline in more detail within our SEC filing. So, we finished 2023 having delivered meaningful subscriber growth, and we continued to pay down our debt.

Our first question comes from the line of Ron Josey with Citi. Please proceed with your question.

Yes.

Hey, Jim This is Jake on for <unk>, Thanks for taking my questions.

Craig Great really great to hear about the generic product rollouts on both Getty and I thought I know last quarter you shared that it had it would have when you expect it to have limited impact.

Yeah.

Hello Hello.

Okay.

Jennifer your line.

Okay.

Greg is on.

Yeah, I'm here I think we might've block Jake.

Yeah.

Oh.

Alright.

Okay.

Can you hear me.

We can we can we can now.

Cut out pretty early on to your questions have you don't mind, just repeating them all again.

Oh, sorry about that well the first the first question was just on G&A I last quarter, you shared that you would expect.

Okay.

Yeah.

Yes.

[noise] any more visibility you could you could share in terms of expectations contributions for this year and then the second question was just on corporate.

Jennifer Leyden: We expanded our AI generative offerings, and nimbly navigated through several unexpected macro challenges. All throughout, we remained fiscally disciplined, we generated healthy levels of free cash flow, and we ended the year with a stronger balance, and we are very well positioned to return to top-line growth as we head into 2024. With that, let's shift into our 2024 guide. We anticipate revenue of $928,000 to 947 million, representing growth of 1.3% to 3.3% year-on-year and currency-neutral growth of 1% to 3%. Assuming current FX rates hold with the Euro above 1.09 and the GDP above 1.27, we expect foreign currency to have a more muted impact on our financial results relative to what we experienced in 2023. For revenue, we estimate a benefit of about $2.5 million for the year, of which approximately $2 million is expected in the fourth quarter.

You noted some continued macro challenges, but we look at it we looked at the resilience and the revenue for purchasing such demand and curious if you could share more about what you're seeing from corporates any specific verticals doing wrong, we're still showing signs of conservatism.

Right.

Okay happy to happy to take both of those on the G&A I front.

I'd say that the expectations for contribution on a material basis.

Still gonna yet still be much longer term in terms of that growth.

We've taken a point of view of again really building the products getting them to market.

And doing that in a subscription model. So it's going to take time for that adoption to accrue to something that's meaningful.

To the business, but with that said I would tell you that we are definitely having a lot of conversations on the sales front, we're getting really good feedback.

Operator: We expect adjusted EBITDA of $298 million, down 1.5% year-over-year and down 1.2% currency neutral. Included in the adjusted EBITDA expectations is a similar cadence for FX, with an estimated $1 million benefit in 2024, with almost all of it expected in the fourth quarter. With that, Operator, please open the call for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that a line is in the question. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

On the uses of the product and where we are seeing adoption of the product.

It's.

Positive and in line to kind of our expectations. So.

But I wouldn't expect.

Significant contributions into our into this year.

They will have a meaningful material impact on our performance around the guidance stated.

With respect to corporate.

It's been a growth segment for this business for a long time, we saw that a little bit choppy or in in 2023 due to the macroeconomic items that were related I think I, specifically called out the technology segments.

Segment sub segment within that as kind of some of the areas that were a bit more choppy than than maybe what we had experienced in prior years.

Operator: And one moment, please, while we poll for questions. Our first question comes from the line of Ron Josey with Citi. Please proceed with your question. Hey team, this is Jake Onterram.

But we expect that segment to continue to grow for us in 2024.

Jake Onterram: Thanks for taking our questions. Craig, really great to hear about the Gen AI product rollouts on both Getty and iStock. I know last quarter you shared that it, you know, it would have, or you expected it to have, limited impact. Hello?

It still continues to be one where internal marketing groups are bringing their sales and marketing in house in order to manage across their websites and social media presence, there sales and marketing collateral and that continues to be the driver behind that so I'm a little bit choppy in 2023.

Operator: Hello. Jennifer and Craig, are your lines, and more? Craig is on.

We will expect to see a little bit of Choppiness in 2024, but again, the corporate segment should be wide growth.

Craig Peters: Yeah, I'm here. I think we might have lost Jade. Oh. Sorry. Can you hear me?

Yeah.

Jake Onterram: We can now head out pretty early on your questions, if you don't mind just repeating them all again. Sorry about that. Well, the first question was just on Gen AI. Last quarter, you shared that you'd expect. Any more visibility you could share in terms of expectations or contributions for this year? And then the second question was just on corporate. You noted some continued macro challenges, but we look at the resilience and the revenue per purchasing customer, and I'm curious if you could share more about what you're seeing from corporates. Any specific verticals doing well or still showing signs of conservative interest? All right. Okay. I'm happy to take both of those.

Thanks, so much.

Thank you. Our next question comes from the line of Cory Carpenter with Jpmorgan. Please proceed with your question.

Hey, Thanks, I just wanted to ask about the agency business you mentioned it improved a little down down mid single digits. Maybe if you could just talk about your expectations for how that will trend in 2024, and then Jennifer.

For you just you know maybe within within your 2024 revenue guide anything you're willing to provide around creative or senatorial and.

And what we should expect given given the even year seasonality. Thank you.

Jim I wanted to just take both of those.

Yeah.

Yeah happy to so I'll start backwards on guidance. So you know as you know, we don't guide specifically to editorial.

Craig Peters: On the Gen AI front, I'd say that the expectations for contribution on a material basis are still going to be much longer term in terms of that growth. We've taken a point of view of, again, really building the products, getting them to market, and doing that in a subscription model. So it's going to take time for that adoption to accrue to something that's meaningful to the business. But with that said, I'd say that we are definitely having a lot of conversations on the sales front. We're getting really good feedback on the use of the product and where we are seeing adoption of the product. It's positive and aligned to kind of our expectations. But I wouldn't expect significant contributions this year that will have a meaningful, material impact on our performance or on the guidance stage.

Or crate up but you know we are heading into an even year normally that would come with an expectation of a level of growth. However, this year will look a little bit different and what we would normally expect to see in terms of that impact will be a bit muted and.

The reasons for that.

Obviously, we're still seeing some lingering impact.

From the strike and certainly as we navigate through Q1 likely to see a bit of that I wouldn't have a heat tracing team. So we're still dealing with a bit of impact from that and then the flip side of that is that the way to think about 'twenty. Two 'twenty three the first half of 2023 was actually grill for editorial so we've got that you know com.

Craig Peters: With respect to corporate, you know, it's been a growth segment for this business for a long time. We saw that a little bit choppy in 2023 due to the macroeconomic items that we discussed. I think I specifically called out the technology segment and the sub-segment within that as kind of some of the areas that were a bit more choppy than maybe what we had experienced in prior years. But we expect that segment to continue to grow for us in 2024. It still continues to be one where internal marketing groups are bringing their sales and marketing in-house in order to manage across their websites, their social media presence, their sales and marketing collateral, and that continues to be the driver behind that. So a little bit choppy in 2023.

That we're navigating through growth versus still navigating through some of those strike impacting each one.

We definitely do you expect to see you know some kind of that revenue is the Olympics without a U S presidential.

Election, we've got here is we did have a bit of revenue that revenue in 2023.

So we expect to see that bump, but again, you know that strike impact well when you start a bit perhaps relative to what we'd normally expect to see and obviously you know when it comes to something like that in the last presidential election hard for us to size that with precision until we've got a best in class and so what all of it is going to look like so.

Well, it's a little bit of color of how editorialist, playing them too to that top line.

Craig Peters: We will expect to see a little bit of choppiness in 2024, but again, the corporate segment should be winding down. Thanks so much.

Come back in a little bit of what that might look later.

On the agency side, so I don't think we're necessarily expecting you know.

A big reversal or agency the chicken club into growth right away until 2024, what we commented about in the prepared remarks is that with a bit of an improvement.

Operator: Thank you. Our next question comes from the line of Cory Carpenter with J.P. Morgan. Please proceed with your question. Hey, thanks. I just wanted to ask about the agency business.

Specifically I used to work right. So you know that that's coming off of pretty steady double digit declines on agency and ending the year exiting the year in that mid single digit decline. So I don't think we're expecting a massive turnaround that we've spoken about on these calls before there's a lot.

Cory Carpenter: You mentioned it improved a little down, down to mid single digits. Maybe if you could just talk about your expectations for how that will trend in 2024. And then Jennifer, you know, for you, just, you know, maybe within your 2024 revenue guide, anything you're willing to provide around, you know, creative versus editorial and what we should expect given given the even-year seasonality. Thank you. Hey, Jen, why don't you take both of those?

Quickly on MACRA.

Right. So that's.

Customers are holding onto their creative and marketing budgets that split as the agencies that quite a bit of that so you know we're cautious on that one again and you don't expect it to turn around but it is well on the 20th of course that of our total revenue at this point won't be exited quite honestly.

Uh huh.

Great. Thank you Jennifer.

Jennifer Leyden: Yeah, happy to. So I'll start backwards on guidance. So, you know, as you know, we don't guide specifically to editorial or creative, but, you know, we are heading into an even year. Normally, that would come with an expectation of a level of growth. However, this year will look a little bit different, and what we would normally expect to see in terms of that, your impact will be a bit muted. The reasons for that.

Youre welcome.

Thank you. Our next question comes from the line of Mark <unk>.

The topics with the benchmark company. Please proceed with your question.

Thank you good evening John.

John.

<unk> for you if I could.

Just hoping to get some visibility and creative revenue retention expectations. This year ex agency.

Jennifer Leyden: Obviously, we're still seeing some lingering impact from the strike and, certainly, as we navigate through Q1, likely to see a bit of that as we navigate through Q2. So we're still dealing with a bit of an impact from that. And then the flip side of that is, as we think about 2023, the 1st half of 2023 was actually in growth for editorial. So we've got that comp that we're navigating through growth versus still navigating through some of those strike impacts in each 1. We definitely do expect to see some good event revenue. We've got the Olympics; we've got a US presidential election.

And I was also hoping you could.

Maybe comment on insurance agency.

And then the second question is just around the EBITDA guidance I'm just curious what.

The expense assumptions, there, just giving us roughly 20 million Delta.

So relative to your top line guidance.

So any color there would be helpful.

Yeah, Mark what do you mind repeating the second question I didn't quite hear that.

Alright.

Second question is.

If you could just talk about the expense assumptions within your.

24.

Adjusted EBITDA guidance.

Just a second.

Jennifer Leyden: We've got euros. We did have a bit of revenue event revenue in 2023. So, we expect to see that bump, but again, you know, that strike impact. We'll use that a bit for us relative to what we normally expect to see. And obviously, you know, when it comes to something like a US presidential election, it's hard for us to size that with precision, and so we get a bit deeper into that.

Yes.

Yeah. The agency I believe you mentioned Aaron.

Just oh, sorry, sorry, sorry, I was looking at this looking for.

If you could comment on churn.

Agency.

Right, Okay, and so I'll start with our EBITDA and so yeah, I think what what Youre seeing there in our EBITDA guidance, you know we've talked quite a bit about how we are employing some proactive cost actions pretty early on in 'twenty. Two 'twenty three so as we enter into 2024.

Jennifer Leyden: into what all of it is going to look like, so it's a little bit of color on how editorial is playing into that top line, and you can back in a little bit of what that might mean for creative. On the agency side, so I don't think we're necessarily expecting a big reversal or the agency to shift into growth right away in 2024. What we comment about in the prepared remarks is that we saw a bit of an improvement. I think specifically I use the word flight, so that's us coming off a pretty steady double digit.

You're seeing a little bit of a reset on our cockpit. It's we're certainly not pulling back on all of that cost management there.

There are certain elements.

The cost pullbacks that we made in 2023 that we've reset entering into 2024, and that's really just to set ourselves up to get back to top line growth.

There are elements of employee and incentive based compensation.

You know as you can imagine are tied to the company's financial performance. So I read that into 2024 at the start of any year, we we'd have within our cost base and expectation of that incentive based comp coming back because there's an expectation that the company heading it's financial performance. So huh.

Jennifer Leyden: Declines on agency, and, you know, ending the year, exiting the year in that mid single-digit decline. So I don't think we're expecting a massive turnaround as we've spoken about on these calls before. It's largely a macro impact, right?

It's really just a bit of a reset again not not a full relieving of all of those cost actions, but we did go into 2020 four pretty deliberately making sure we're investing in growth.

Jennifer Leyden: So, as customers are holding tight onto their creative and marketing budgets that flow through the agencies that flow through that. So, you know, we're cautious on that 1 again.

Southern herself that she got background.

A question on a revenue retention and churn so we don't we don't.

Cory Carpenter: We don't expect it to turn around, but it is well under 20% of our total revenue at this point as we exit 2023. Great. Thank you. Thank you, Jennifer.

Really gave a revenue retention figure our stat on creative burst as editorial.

I think the way that I would answer that question and I'm, assuming you're talking a little bit more about the subscriber base, but you know we continue to see.

When we think about our large enterprise customers, we continue to see those retention rates pretty much at 100% right. So the enterprise side of things, we continue to see that figure being really strong as we start to grow that subscriber base.

Operator: You're welcome. Thank you. Our next question comes from the line of Mark Zgutowicz with the Benchmark Company. Please proceed with your question. Thank you. Good evening, Craig and Jen.

And we talked about a lot of that growth is coming from that the smaller e-commerce and subscription side of things those obviously come at least at the start with a lighter revenue retention rate, so you'll see that pull down a bit.

Mark John Zgutowicz: Jen, a couple of questions for you, if I could. I was just hoping to get some visibility on creative revenue retention expectations this year at X agency. And I was also hoping you could, and Andy Kalman, on Churn X Agency.

You know from something like 100% on the enterprise side of it and those smaller e-commerce subscriptions those all do fit on the creative side Oh I'm.

Mark John Zgutowicz: And then the second question is just around the EBITDA guidance. I'm just curious what are the expense assumptions there, just given there's roughly $20 million delta relative to your top line guidance, so any color there would be helpful. Mark, would you mind repeating the second question? I didn't quite hear that.

Not sure if that.

That answers the question, but you know we don't we don't really get that create a person editorial attention or turn element.

That's helpful. Dan Thank you.

Okay.

Okay.

Thank you alright.

Our next question comes from the line of Tim Nolan with Macquarie Asset management. Please proceed with your question.

Mark John Zgutowicz: All right, the second question is, if you could just talk about the expansive functions within your 24 Justity Without Guidance. Sorry, the second question, yeah, the agency item you mentioned. I heard the agency. Oh, just, oh, sorry, sorry, sorry.

Oh, Hi, Tim from Macquarie Research not asset management.

Just curious Craig if you could give a bit more color on the potential revenue from AI. You said earlier that you expect it to be kind of a longer term.

Jennifer Leyden: I was looking for, just looking for... If you could comment on SHERN tax agency. Right. Okay. So, I'll start with Evita.

The ramp in revenues, but would we see this in a line like paid download growth me would there be a high demand for AI.

Jennifer Leyden: So, yeah, I think what you're seeing in our Evita guidance. We talked quite a bit about how we employed some proactive cross-actions pretty early on in 2023. So, as we enter into 2024, you're seeing a little bit of a reset on our cost base. But we're certainly not pulling back on all of that cost management.

For images and for data behind that the people can used to two.

You know to generate there.

Their own images and I didn't say that very well, but you know what I mean would that come from the paid download side, which has basically been flat quarter over quarter or would that come in somewhere else.

Jennifer Leyden: There are certain elements of the cost pullbacks that we made in 2023 that we've reset entering into 2024. And that's really just to set ourselves up to get back to top line growth. There are elements of employee incentive-based compensation that, you know, as you can imagine, are tied to the company's financial performance. So, as we reset into 2024, at the start of any year, we'd have within our cost base an expectation of that incentive-based comp coming back because there's an expectation of the company meeting its financial performance. So, it's really just a bit of a reset.

Yeah. So the first let me just characterize how we are approaching and so we are we are licensing services.

To our end customers are those services that have been developed in partnership with companies like Nvidia.

We have not pursued to any meaningful degree licensing of our data.

On a basis that they.

It would generate revenue against the data side of things. So we believe long term that AI is going to be a fundamental tool of creative and we want to build the business around offering those services versus licensing our data out to third parties to build services.

Jennifer Leyden: Again, not a full relieving of all of those cross-actions, but we did go into 2024 pretty deliberately, making sure we're investing in growth and setting ourselves up to get that growth. The question on revenue retention and churn. So, we don't really give a revenue retention figure or stat on creative versus editorial. But, I think the way that I would answer that question, and I'm assuming you're talking a little bit more about the subscriber base, but, you know, we continue to see when we think about our large enterprise customers, we continue to see those retention rates pretty much at 100%. Right?

We built we fund them I believe our data.

<unk> will be critical in differentiating those services as we go to market.

And so that's the trade that we are making it. It is a long term trade that was that we believe is the right one for the business.

Jennifer Leyden: So, on the enterprise side of things, we continue to see that figure be really strong as we start to grow that subscriber base. And we talked about how a lot of that growth is coming from the smaller e-commerce subscription side of things. Those obviously come, at least at the start, with a lighter revenue retention rate. So, you'll see that pull down a bit, you know, from something like 100 percent on the enterprise side of it. And those smaller e-commerce subscriptions, those all do sit on the creative side of the business. So, not sure if that answers those questions, but, you know, we don't really give a creative versus editorial retention return element. That's helpful, Jim.

In terms of again owning these services in the end customer relationships and delivery of those services to our customer. So you will see over time, you will see those results in our subscriber count.

As customers subscribe.

Subscribe into generative AI services on an annualized basis, you will see that show up into our paid downloads section as they generate imagery from those services and then download that imagery and use it within their marketing and sales and collateral.

Mark John Zgutowicz: Thank you. Thank you. Thank you. Thank you.

In other.

Parts of their marketing stack.

Operator: Our next question comes from the line of Tim Nollen with Macquarie Asset Management. Please proceed with your question. Hi Tim, from Macquarie Research, not Asset Management. But just curious, Craig, if you could give a bit more color on the potential revenue from AI. You said earlier that you expected it to be kind of a longer term business at www.gettyimages.com. Yeah, so first let me just characterize how we are approaching

So yes, you will see those start to accrue through the metrics.

But it'll take some time for those to have a meaningful this goes back to the comment I think Jake.

Eric question, Jake asked it's going to take a while for those to be meaningful relative to $995 million paid.

Paid annual downloads.

Right. Okay that makes sense. Thanks can I ask a separate question which is.

Timothy Wilson Nollen: So we are licensing services to our end customers. Those services have been developed in partnership with companies like NVIDIA. We have not pursued to any meaningful degree the licensing of our data on a basis that would generate revenue on the data side of things.

Looking at your subscription.

<unk> revenue of 654% in the quarter, which was up.

Up quite a bit from a year ago, but it was down a little bit from Q3 and I Wonder if that is just a normal Q4 kind of a seasonal trends there might be some more kind of seasonal related Q4, one off types of sales that might've actually brought that number down sequentially.

Craig Peters: So, we believe long term that AI is going to be a fundamental tool for creatives, and we want to build the business around offering those services versus licensing our data out to third parties to build services. We fundamentally believe our data will be critical in differentiating those services as we go to market.

Yeah, we saw a little bit of in Q4, we saw a little bit.

Craig Peters: And so that's the trade that we are making. It's a long-term trade that we believe is the right one for the business in terms of, again, owning these services and the end customer relationships in delivery of those services to our customers. So, over time, you will see those results in our subscriber counts as customers subscribe to generative AI services on an annualized basis. You will see that show up in our paid download section as they generate imagery from those services and then download that imagery and use it within their marketing and sales collateral and other parts of their marketing stack. So, yes, you will see those start to accrue through the metrics, but it'll take some time for those to be meaningful. This goes back to the comment, I think, Jake, or question Jake asked. It's going to take a while for those numbers to be meaningful relative to 95 million paid annual downloads.

A stronger close the year a lot of that was through a la carte purchases in the business again Gen kind of mentioned the rebound in the agency in Q4, a slight rebound they tend to buy on an all of the current basis. We also saw some of the you know the strike impacts ameliorate on our business, most notably within our paid.

<unk> business, which is not done within subscriptions. So so those are some of the things that Q4 relative to Q3 took that percentage down a bit.

I would say all of those were good things though.

Okay. Thank you.

Yeah.

Thank you.

We have reached the end of the question and answer session Mountain.

This also concludes today's conference and you may disconnect your lines at this time.

Thank you everybody has it.

Okay.

Yes.

[music].

Timothy Wilson Nollen: Right. Okay, that makes sense. Thanks.

Craig Peters: Can I ask a separate question, which is looking at your subscriptions as a percentage of revenue? I think 54% in the quarter, which was up quite a bit from a year ago, but it was down a little bit from Q3. And I wonder if that is just a normal Q4, kind of a seasonal trend; it might be some more kind of seasonal-related Q4 one-off types of sales that might have actually brought that number down sequentially. Yeah, we saw a little bit of, in Q4, we saw a little bit stronger close to the year. A lot of that was through a la carte purchases in the business. Again, Jen kind of mentioned the rebound in the agency. In Q4, we saw a slight rebound. They tend to buy on an a la carte basis.

Yeah.

[music].

Craig Peters: We also saw some of the, you know, the strike impacts ameliorate on our business, most notably within our paid assignment business, which is not done within subscriptions. So, those are some of the things that Q4 relative to Q3 took that percentage down a bit. But I would say all those were good things.

Timothy Wilson Nollen: Okay, thank you. Thank you, and we have reached the end of the question and answer session. This also concludes today's conference, and you may disconnect your lines at this time. Thank you.