gety-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

GETTY IMAGES HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

001-41453

(Commission

File Number)

87-3764229

(I.R.S. Employer

Identification Number)

605 5th Ave S. Suite 400

Seattle, WA 98104

(Address of principal executive offices) (Zip Code)

(206) 925-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock

GETY

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 5, 2023, 397,100,516 shares of Class A common stock, par value $0.0001 per share of Getty Images Holdings, Inc. were issued and outstanding.

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GETTY IMAGES HOLDINGS, INC.

Form 10-Q

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		Page No.
PART I. FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of M arch 3 1 , 202 3 and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 3 and 202 2	2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2023 and 2022	3
	Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2023	4
	Condensed Consolidated Statements of Redeemable Preferred Stock and Stockholders’ Deficit for the Three Months Ended March 31, 202 2	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	35
Item 6.	Exhibits	36
Signatures		37

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PART I – FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of the words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “target” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether or not identified in this report, and on the current expectations of our management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control.

These forward-looking statements are subject to a number of risks and uncertainties, including:

•our inability to continue to license third-party content and offer relevant quality and diversity of content to satisfy customer needs;

•our ability to attract new customers and retain and motivate an increase in spending by its existing customers;

•the user experience of our customers on 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;

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•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 report 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 report, 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.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value data)

(unaudited)


	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 (Note 7)

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

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(unaudited)


	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

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)


	Three Months Ended March 31,
	2023		2022
NET INCOME	3,203		25,107
OTHER COMPREHENSIVE INCOME (LOSS):
Net foreign currency translation adjustment gains (losses)	8,380		(3,878)
COMPREHENSIVE INCOME	11,583		21,229
Less: Comprehensive gain attributable to noncontrolling interest	507		207
COMPREHENSIVE INCOME ATTRIBUTABLE TO GETTY IMAGES HOLDINGS, INC.	$	11,076	$	21,022

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands except share amounts)

(unaudited)


	Class A Common Stock				Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss		Total Getty Images Holdings, Inc. Stockholders’ Equity		Noncontrolling Interest		Total Stockholders’ Equity
		Shares	Amount
BALANCE - December 31, 2022		394,771,254	$	39			$	1,936,324	$	(1,282,354)	$	(108,928)	$	545,081	$	47,967	$	593,048
Net income		—	—				—		2,696		—		2,696		507		3,203
Net foreign currency translation adjustment gains in comprehensive income		—	—				—		—