Getty Images Q3 2025: Contradictions Emerge on Agency Business, AI Subscription Impact, and Corporate Segment Growth

Date of Call: None provided

Financials Results

• Revenue: $240 million, down 0.2% YOY (down 2% currency-neutral)
• Gross Margin: 73.2%, compared with 73.4% in Q3 2024
• Operating Margin: Adjusted EBITDA margin 32.8%, compared with 33.5% in Q3 2024 (down 70 bps YOY)

Guidance:

• Updated full-year 2025 revenue guidance $942M–$951M (growth 0.3%–1.2% reported; -0.5%–0.5% currency-neutral)
• Adjusted EBITDA guidance $291M–$293M (down 3.0%–2.3% reported; -4.1%–-3.3% currency-neutral)
• Guidance includes approx. $6.5M FX benefit to revenue and approx. $3.5M FX benefit to EBITDA; includes ~$8M one-time SOX acceleration costs (≈$2.5M in Q4)
• Guidance excludes merger-related costs and notes odd-year editorial event comparisons and slower return of production activity

Business Commentary:

• Revenue Performance and Growth Segments:
• Getty Images reported third-quarter revenue of $240 million, representing a slight 0.2% year-over-year decrease and 2% on a currency-neutral basis.

• Within the quarter, growth in creative sectors, such as Premium Access and AI data licensing, was offset by declines in agency customers and the challenging editorial compare due to the Paris Olympics and election cycle.

• Subscription Business and Retention Rates:

• Annual subscription revenue grew to 58.4% of total revenue, up from 52.4% in the previous year, indicating 11.2% year-on-year growth or 9.3% on a currency-neutral basis.
• The increase was primarily driven by Premium Access, with a retention rate of 90.3%, although slightly lower than last year, due to the absence of major political and sporting events.

• Impact of Merger Review and Litigation:
• The UK Competition and Markets Authority referred the proposed merger of Getty Images and Shutterstock to a phase two review process, delaying the transaction to 2026.

• The judgment in the UK litigation against Stability AI ruled in favor of Getty Images, affirming trademark infringement but dismissing secondary infringement claims.

• Editorial and AI Revenue Trends:

• Editorial revenue was $89.3 million, down 3.7% year-on-year and 5.6% on a currency-neutral basis, due to tough comparisons to the strong editorial event calendar in Q3 2024.
• AI revenue recognition impacts included a decline from 2024 due to the accelerated nature of revenue recognition, but new opportunities like the Perplexity partnership are emerging.

Sentiment Analysis:

Overall Tone: Neutral

• Company reported flat revenue (-0.2% YOY) and adjusted EBITDA margin of 32.8% (vs. 33.5% prior year) while highlighting new AI licensing deals (e.g., Perplexity) as potential growth drivers. Offset by regulatory delay on merger (CMA phase two referral) and ongoing agency and editorial comparability headwinds. Management reiterated disciplined cost control and provided updated 2025 guidance.

Q&A:

• Question from Jay Keller (City) on behalf of Ron Josie: Please unpack Getty’s key AI initiatives in the quarter and how they tie to overall AI strategy and potential impacts to 2026 revenue; specifically, what is the structure and benefit of the Perplexity partnership, and are bundled AI capabilities in iStock driving new customer acquisition, retention, or upsell?
  Response: Perplexity is a confidential licensing deal similar to prior platform licenses; management views LLM/data licensing plus bundling generative-AI into subscriptions as meaningful growth avenues that should boost subscription renewals over time, but it’s too early to quantify 2026 impact.

• Question from Mark Gettowitz (Benchmark): What was Premium Access retention in Q3 versus Q2 and how does the rest of the subscription business compare? Also, which customer cohorts drove the sequential recovery in creative and how should we think about Q4 compares?
  Response: Premium Access has the highest and stable retention Q2–Q3; lower-tier subscriptions (iStock, Unsplash) have higher churn. Q3 creative growth was largely from normalization of PA allocation versus 2024 and a large upfront PA deal; agency remains a persistent drag, and creative is expected to return to very low single-digit growth in Q4.

Contradiction Point 1

Agency Business Performance

It involves differing descriptions of the agency business performance, which impacts overall revenue projections and market expectations.

What customer cohorts drove the sequential recovery in the Creative business, and how should we assess Q4 performance sequentially or YoY? - Mark Gettowitz (Benchmark)

2025Q3: The creative growth in Q3 was due to renormalizing revenue allocations to creative and a large deal with upfront revenue recognition. However, agency business remains in decline, indicating single-digit growth prospects for Q4. - Craig Peters(CEO)

How do declining creative revenue and growing data licensing trends impact the business? What guidance does the 2025 outlook provide for these segments? - Mark John Zgutowicz (The Benchmark Company, LLC, Research Division)

2025Q2: The agency business is primarily a la carte, so its weakness impacts the creative a la carte sales. The editorial a la carte segment performed well, but the agency's impact was notable in the creative a la carte number. - Jennifer Leyden(CFO)

Contradiction Point 2

AI Offering and Subscription Impact

It involves the perceived impact of AI offerings on customer acquisition, retention, and subscription growth, which are critical for revenue forecasting and strategic planning.

Is it driving new customer acquisition, retention, or upsell? - Ron Josie (City)

2025Q3: Bundling AI tools does not primarily drive new customer acquisition but increases value for existing customers, leading to potential improvements in renewal rates. Content remains the key driver for new customers, with AI providing additional value. - Craig Peters(CEO)

Can you provide an update on your gen AI offering, client adoption, and revenue? - Danny Pfeiffer (JPMorgan)

2025Q1: AI capabilities are increasingly bundled with subscriptions to enhance content modification. Positive customer feedback is driving steady adoption. - Craig Peters(CEO)

Contradiction Point 3

Subscription Growth and Corporate Segment

It involves the growth and retention rates of the subscription business, particularly within the corporate segment, which is critical for understanding revenue trends and strategic focus.

Which customer segments drove the sequential recovery in creative, and how to assess Q4 comparisons (sequential and year over year)? - Mark Gettowitz (Benchmark)

2025Q3: Creative growth in Q3 was due to renormalizing revenue allocations to creative and a large deal with upfront revenue recognition. - Craig Peters(CEO)

Could you clarify the strength and shift in mix to corporate clients in your subscription business, and any changes in subscriber base size and scale? - Ron Josey (Citi)

2025Q1: Getty Images is seeing continued growth in corporate marketing groups, driving subscription demand. iStock's small and medium-sized business subscriptions are increasing. Subscription growth is expected to slow but continues to show strong retention and renewal rates, particularly within the corporate segment. - Craig Peters(CEO)

Contradiction Point 4

Agency Business and Corporate Segment Performance

It involves the performance and growth expectations of key customer segments, which are critical for understanding the company's financial health and future prospects.

Which customer cohorts drove the sequential recovery in the creative segment, and how should we view Q4 comparisons sequentially or year-over-year? - Mark Gettowitz (Benchmark)

2025Q3: Creative growth in Q3 was due to renormalizing revenue allocations to creative and a large deal with upfront revenue recognition. However, agency business remains in decline, indicating single-digit growth prospects for Q4. - Craig Peters(CEO)

What is the outlook for segment revenue growth, expected data licensing revenue over the next 12 months, and visibility on spending trends for Agency, Corporate, and Media clients compared to last year? - Mark Zgutowicz (The Benchmark Company)

2024Q4: Agency spend was down 11% as reported and 17% on an organic basis. We believe that this is due to a combination of factors, including general economic conditions, weak top line performance at some of our agency holding company partners, and specific events such as the WPP restructuring. - Craig Peters(CEO)