Getty's Q3 2025: Contradictions Emerge on AI Revenue, Subscription Growth, and Agency Segment Health

Date of Call: None provided

Financials Results

• Revenue: $240 million, down 0.2% YOY and down 2.0% on a currency-neutral basis
• Gross Margin: 73.2%, compared with 73.4% in Q3 2024
• Operating Margin: Adjusted EBITDA margin 32.8%, compared to 33.5% in Q3 2024

Guidance:

• Revenue guidance $942M–$951M for FY2025 (growth of 0.3%–1.2% reported; -0.5%–0.5% currency-neutral).
• Adjusted EBITDA guidance $291M–$293M (year-on-year decline of 3%–2.3% reported; 4.1%–3.3% decline currency-neutral).
• FX tailwind ~ $6.5M to revenue and ~$3.5M to adjusted EBITDA in 2025 (including Q4 benefits).
• Guidance includes ~$8M one-off SOX acceleration in SG&A (about $2.5M in Q4); merger-related costs excluded.
• Notes potential macro/tariff risks that may not be fully reflected.

Business Commentary:

• Revenue and Growth Trends:
• For Q3 2025, Getty Images reported revenue of $240 million, representing a slight 0.2% year-over-year decrease, and 2% on a currency-neutral basis.

• The decrease was primarily due to tough comparisons against a strong editorial calendar in Q3 2024 and declines in the agency business.

• Subscription and Creative Revenue:

• Annual subscription revenue was 58.4% of total revenue, up from 52.4% in Q3 2024, representing year-on-year growth of 11.2%.

• This growth was driven by premium access and the addition of active annual subscribers, while agency headwinds persisted.

• Editorial and AI Data Licensing:

• Editorial revenue was $89.3 million, down 3.7% year-on-year, largely due to tough comparisons from 2024 events.

• Revenue from AI data licensing decreased from 2024 levels but showed potential with new opportunities like AI large language model deals.

• Cost Management and SG&A Expense:

• SG&A expense was $101 million, up $0.9 million year-on-year, with the expense rate increasing to 42.1% of revenue.

• The increase was primarily due to professional fees for SOX compliance and ongoing litigation with Stability AI.

• Merger and Regulatory Challenges:

• The proposed merger of Getty Images and Shutterstock faces a Phase II review by the U.K.'s Competition and Markets Authority.
• The delay is due to the referral of the merger to a Phase II review process, impacting the expected closing time in 2026.

Sentiment Analysis:

Overall Tone: Neutral

• Management highlighted a near-flat top line ($240M, down 0.2% YOY) with adjusted EBITDA margin still strong at 32.8%, but noted regulatory setback on the merger (CMA Phase 2 referral) delaying close into 2026; they reiterated revenue/EBITDA guidance and cited modest FX tailwinds and one-off SOX costs.

Q&A:

• Question from Jay (Citi): Could you unpack Getty's key AI initiatives in the quarter and how they tie back to your AI strategy and potential impacts to 2026 revenue? In particular, can you explain the structure and benefits of the Perplexity partnership? And re: iStock bundling AI capabilities into subs, is that driving new customer acquisition, retention or upsell?
  Response: Perplexity is a confidential licensing deal similar to prior platform licenses; such licensing plus bundling generative-AI tools into subscriptions is aimed at adding customer value and improving renewals; these initiatives are nascent and could become material over time but it's too early to quantify new-customer impact.

• Question from Jay (Citi): Could you dive deeper into the health of corporate and media customer segments and specifically comment on the impact of the Hollywood strikes on production recovery?
  Response: Media declines were driven by broadcast/production subsegments that have not returned to pre-strike levels; corporate was slightly down this quarter but remains the largest, growing segment with enterprise retention near 100%.

• Question from Mark Zgutowicz (Benchmark): What was premium access subscription retention in Q3 versus Q2 and how does the rest of the subscription business compare? And what cost/revenue drivers led to the sequential recovery in creative and how should we think about Q4 compares?
  Response: Premium Access retention is the highest and stable (company does not disclose quarter-to-quarter stat); other subs (iStock/Unsplash) see higher churn. Q3 creative growth largely reflected normalization of PA allocation back to historical creative/editorial splits plus a multiyear deal with upfront revenue; agency weakness persists so expect creative to revert to low single-digit growth in Q4.

Contradiction Point 1

AI Revenue Impact

It involves differing expectations about the potential impact of AI on revenue, which is crucial for understanding the company's growth strategy and financial outlook.

Can you outline Getty's key AI initiatives this quarter, how they align with your overall AI strategy, and their potential impacts on 2026 revenue? - Jay [indiscernible](Citi)

20251111-2025 Q3: We expect AI large language models could develop into a material revenue stream. - Craig Peters(CEO)

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

2025Q1: Adoption of AI is in low single digits, with revenue contributions in low single-digit millions. - Craig Peters(CEO)

Contradiction Point 2

Corporate Subscription Growth and Retention

It involves differing statements about the growth and retention of corporate subscriptions, which are key indicators for the company's financial health and strategic direction.

How is the retention of premium access subscriptions? - Mark Zgutowicz (Benchmark)

20251111-2025 Q3: Premium access retention rates are high and consistent. Represents roughly about 1/3 of the company revenue. - Craig Peters(CEO)

Can you discuss the shift to corporate subscriptions and any change in the size of your subscriber base? - Ron Josey (Citi)

2025Q1: We expect subscription growth to slow but remain optimistic about revenue retention and renewal rates, especially in the corporate space. - Craig Peters(CEO)

Contradiction Point 3

Agency Customer Segment Health

It reflects varying analyses of the health of the agency customer segment, which could impact strategic decisions and financial forecasts.

Could you elaborate on the health of the corporate and media customer segments, particularly the impact of Hollywood strikes on media production levels not returning to pre-strike levels? - Jay [indiscernible](Citi)

20251111-2025 Q3: Agency revenue declined 22% in Q3. - Jennifer Leyden(CFO)

What explains the economic divergence between declining creative and growing data licensing? What does the 2025 guidance project for creative and data licensing in the second half? - Mark John Zgutowicz(The Benchmark Company, LLC, Research Division)

2025Q2: Creative decline of about 5% is consistent with Q1, driven by agency challenges. - Jennifer Leyden(CFO)