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Getty Images Holdings (GETY) Q1 2026 Earnings Call Transcript

Date

Monday, May 11, 2026 at 4:30 p.m. ET

Call participants

  • Chief Executive Officer — Craig Peters
  • Chief Financial Officer — Jennifer Leyden
  • Chief Legal Officer and Corporate Secretary — Steven Kanner

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Takeaways

  • Revenue -- $226.6 million, up 1.1% as reported and down 2.5% on a currency-neutral basis, with a 390 basis-point drag from revenue recognition timing impacts.
  • Adjusted EBITDA -- $61.6 million, down 12.2% year over year (15.2% on a currency-neutral basis); margin declined to 27.2% from 31.3% due to higher cost of revenue and SG&A, including Winter Olympics expenses.
  • Annual subscription revenue retention rate -- 90% in the latest twelve months, compared to 92.7% in 2025, with the drop primarily due to the end of high-impact media events and one-time 2025 spend.
  • Active annual subscribers -- 258,000 for the period, down from 318,000 in 2025, reflecting the discontinuation of iStock’s free trial new customer acquisition program, which negatively affected subscriber metrics but improved quality and economics.
  • Paid downloads -- 92.2 million, nearly flat year over year.
  • Creative revenue -- $126.2 million, down 4.5% (8% on a currency-neutral basis), negatively impacted by a shift in customer download preferences to Editorial, Agency declines (down 14%), and marketing changes affecting iStock.
  • Editorial revenue -- $91.7 million, up 11% (7.1% on a currency-neutral basis), propelled by demand for global sports coverage including the Milan Cortina Winter Olympics and increased revenue allocation from Creative.
  • Corporate segment revenue -- Grew 6% year over year, identified as a sustained growth driver.
  • Geographic performance -- Americas grew 1.9% on a currency-neutral basis; EMEA fell 6.9% due to Agency and production weakness; APAC declined 11.7% mainly from Agency and the lack of certain one-time projects.
  • Free cash flow -- $24 million, a turnaround from negative $300,000 in 2025, aided by lower merger costs, interest, and timing effects in working capital.
  • Balance sheet cash -- $90.6 million, up $6.5 million sequentially, driven by free cash flow, offset by loan amortization and foreign exchange effects.
  • Total debt -- $1.99 billion as of March 31, incorporating balances from senior secured notes, term loans, and a $628 million note held in escrow for the pending merger.
  • Merger status -- Transaction cleared in all jurisdictions except the U.K., where the Competition and Markets Authority (CMA) review is ongoing with a final decision expected by June 14; only £3.5 million of U.K. revenue is at issue.
  • AI licensing -- Minimal licensing revenue booked in Q1; management expects greater contributions in the second half, with a stated strategic preference for direct platform integrations over volume-based licensing.
  • Guidance maintained -- Fiscal 2026 revenue expected in the $948 million-$988 million range (down 3.4% to up 0.6%), and adjusted EBITDA at $279 million-$295 million (down 12.9% to up 8.1%), unchanged from prior guidance; includes assumptions for FX tailwinds and the impact of major licensing agreements signed in 2025.
  • Cost structure and SG&A -- SG&A expense was $102.2 million, or 45.1% of revenue; excluding stock-based compensation, it was $98.8 million (43.6% of revenue), elevated by compensation, Olympics, and professional fees, but partly offset by lower marketing spend.
  • Premium Access retention -- Maintained 100% retention in Q1, with broader annual subscription revenue retention at 90% due to free trial churn and event-driven one-time spend.
  • Custom content and AI -- Custom content, including video and custom AI, grew over 250% year over year; Unsplash Plus subscription revenue up approximately 20%.
  • Adjusted EBITDA less CapEx -- $45.5 million, down 16.3% (19.4% on a currency-neutral basis); margin was 20.1% compared to 24.3% in 2025.
  • One-time expenses -- Nearly $115 million in one-time costs since early 2025 (related to merger, refinancing, litigation, and SOX compliance) are now "largely behind us," enhancing confidence in free cash flow normalization.

Risks

  • Adjusted EBITDA margin dropped to 27.2% from 31.3%, attributed to event-driven cost increases and product mix, with normalization anticipated only in the second half.
  • The annual subscription revenue retention rate fell to 90% due to discontinuation of iStock free trial and the absence of high-impact media events, with management noting, "free trial subscription cancellations continue to be a drag on this rate."
  • Agency revenue, now less than 15% of total, declined 14% year over year, reflecting "long-term decline as they contend with shifting media mix, in-housing of production, and the adoption of AI."
  • APAC revenue dropped 11.7% on a currency-neutral basis, driven primarily by Agency declines and non-recurrence of one-time 2025 projects.

Summary

Getty Images Holdings (GETY 3.18%) held full-year revenue and adjusted EBITDA guidance steady despite mixed segment performance and soft underlying trends in certain categories. The company cited progress on regulatory approval of its pending merger, with a singular U.K. decision outstanding and only a minor revenue segment affected. Cash flow improved notably due to lower outflows for merger and litigation, reversal of prior negative trends, and clearer run-rate outlook on one-time costs. Content platform innovation was highlighted as a strategic focus, with direct AI integrations preferred over opportunistic licensing, and growth tracked in custom content offerings. Guidance transparency included explicit reference to difficult prior-year comparison periods due to 2025 accelerated revenue recognition, suggesting underlying "solid growth" when those effects are normalized.

  • Management stated quarterly AI licensing activity was "very low in Q1" and expects incremental revenue in the second half from more "selective" deals, favoring deeper model/platform integration over high-volume third-party licenses.
  • The company discontinued iStock's free trial acquisition program in June 2025, acknowledging "free trial conversions consistently delivered lower revenue per subscriber, annual subscription renewal rates below 10%, and a less attractive customer lifetime value."
  • Olympics and major events provided a short-term revenue boost but altered segment allocation, as Premium Access customers shifted download patterns from Creative to Editorial during periods of heightened news value.
  • SG&A increase was mostly driven by incentive compensation, merit pay, Olympics coverage, and compliance spending, with a portion anticipated to normalize—portfolio rationalization yielded targeted layoffs in Agency support without redeployment of those roles.
  • Guidance continues to reflect $6.9 million in one-off SOX compliance SG&A, up from $5.6 million in prior outlooks, offset by reductions elsewhere in SG&A.

Industry glossary

  • Agency: Revenue stream from external creative agencies purchasing licensed content, identified as structurally declining due to industry shifts and AI disruption.
  • MicroStock: High-volume, low-price segment of photo licensing, often affected by SEO, affiliate traffic, and AI-driven search changes.
  • Premium Access: Largest Getty Images Holdings subscription offering, giving customers a mixed allocation to both Creative and Editorial content.
  • Signature content: Exclusive, higher-value licensed images within the iStock product line, shown to drive greater annual spend and retention versus Essentials packages.
  • 606 revenue recognition: Refers to ASC 606, the accounting standard driving timing impacts in reported revenue during periods with multiyear or accelerated contracts.
  • SOX compliance: Sarbanes-Oxley Act-related internal controls and compliance spending, flagged as a recent source of material one-time cost increases.
  • CMA: U.K. Competition and Markets Authority, the regulator determining the final outcome on Getty Images Holdings’ pending merger clearance in the U.K.

Full Conference Call Transcript

Steven Kanner: Good afternoon, and thank you for joining our first quarter earnings call. Joining me on today’s call are Craig Peters, Chief Executive Officer, and Jennifer Leyden, Chief Financial Officer. Before we begin, we would like to note that due to the ongoing regulatory review process, we will not be able to comment on the first quarter 2026 share stock operating results. We appreciate your understanding. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks, uncertainties, and assumptions which could cause our actual results to differ materially from these statements.

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.gettyimages.com. During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA, 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 a description, limitations, and rationale for using each measure can be found in today’s press release and our filings with the SEC. After our prepared remarks, we will open the call for your questions. With that, I will hand the call over to our Chief Executive Officer, Craig Peters.

Craig Peters: Thanks, Steven, and thanks to everyone for taking the time to join us today. I will start with a brief overview of the quarter, and then step back to discuss how we are positioning the business as market conditions continue to evolve. Jennifer will then take you through the full results in more detail. First quarter revenue for 2026 was $226.6 million, up 1.1% reported and down 2.5% on a currency-neutral basis. Adjusted EBITDA was $61.6 million, down versus last year, reflecting a combination of higher cost of revenue due to mix and timing impacts, as well as elevated costs associated with our Winter Olympics coverage in the quarter.

Consistent with prior commentary on these calls, we are operating in a dynamic market environment, particularly across parts of Creative. Most notable are the secular challenges with agencies, and across the MicroStock category. Agencies, now less than 15% of our total revenue, have been in long-term decline as they contend with shifting media mix, in-housing of production, and the adoption of AI. In response to these changes, we continue to right-size our resources to cover that agency space.

Within MicroStock, we see the category impacted by search engine changes incorporating AI results, the knock-on effects across affiliate integrations that depend on SEO traffic, and the emergence of generative AI offerings in bundles. iStock continues to hold up well relative to what we are seeing across the MicroStock category. This speaks to the quality of our content and the quality of customers that content attracts. Aligned to this, we are increasingly focusing iStock merchandising and marketing on our high-quality exclusive content and on those customers who value it. While it can negatively impact some KPIs in the near term, it is a deliberate shift that should only improve our relative financial performance within this category.

But again, it does impact some KPIs. Outside these areas, where the vast majority of our business and subscription revenues reside, we continue to see growth and opportunity. We continue to see strong renewals with our existing customers supported by our high-quality content and coverage and the value we provide in support of their needs. We also continue to draw new customer interest as they try to reach their audiences and execute their commercial strategies. This was on display at the Milan Cortina Winter Olympics. The Olympics demand operational and logistical expertise across editorial and commercial requirements.

Our ability to deploy at global scale, deliver content in real time, and serve a wide range of customers from media organizations to new and old global sponsors continues to differentiate Getty Images Holdings, Inc. in ways that are difficult to replicate. Importantly, these events are not one-off moments. They reinforce longstanding customer relationships and generate downstream demand across editorial, creative, and custom solutions. Looking ahead, we see similar multiyear visibility tied to upcoming global tentpole events. As the U.S. approaches the America 250th anniversary, customers are increasingly drawing upon our unique archive, our trusted editorial coverage, and custom production capabilities to support programming, brand activations, and educational initiatives around this milestone.

This is demand that builds over time and monetizes across multiple parts of our platform. Likewise, our longstanding relationship with FIFA positions us at the center of the upcoming World Cup cycle, where Getty Images Holdings, Inc. serves as both a primary content provider and a strategic partner to federations, broadcasters, brands, and sponsors. These events provide clear line of sight into future revenue opportunities tied to scale, access, and rights certainty. Together, the Olympics, America 250, and the World Cup illustrate how our coverage, our archive, and our unique capabilities combine to allow customers to uniquely tap into moments that carry both cultural significance and commercial complexity.

I would be remiss if I did not recognize our photographer and editorial teams whose work is at our core and continues to be recognized across the industry. Their expertise and talent remain central to our value proposition. That commitment was recognized during the quarter with the team earning nearly 90 industry awards of excellence in categories including news, sport, and politics, at ceremonies such as the White House News Photographers Association Awards, Pictures of the Year International, the SJA British Sports Journalism Awards, and the NPPA’s Best of Photojournalism Awards.

Turning to the capital structure, following the recent court decision related to the ALTA CR M warrant litigation, we satisfied the judgment through a draw on our revolving credit facility. Given the durability of our value proposition, this obligation is fully manageable within our liquidity position and does not change our operating priorities or investment plans. We continue to maintain the full support of our core shareholders. Turning to the merger, as mentioned last call, the transaction has been cleared without condition in all jurisdictions except the U.K. We continue to engage constructively with the CMA as they complete the review, and we expect a final decision in June. I continue to be excited for what lies ahead.

The unique foundational pillars remain as strong as ever: the quality of our content and coverage, the expertise of our staff, the quality of our partners, the commitment of our customers, and the strength of our brands. I continue to see opportunities to grow within our existing customers and to serve new markets given our unique content scale and capabilities. And with that, I will turn it over to Jennifer to take you through the more detailed financials.

Jennifer Leyden: Q1 revenue was $226.6 million, up 1.1% or down 2% on a currency-neutral basis. Included in these results are timing impacts of revenue recognition which reduced Q1 growth by approximately 390 basis points. Corporate continues to be a growth driver for us, with revenue up 6%. Media was flat with gains in the Americas offset by production declines in EMEA, while Agency continues to be a headwind for us, down 14% but consistent with recent decline trends.

Across our major geographies, our largest market, the Americas, was in growth, up 1.9% on a currency-neutral basis, while EMEA was down 6.9% due to weakness in both Agency and production, and APAC was down 11.7% driven primarily by Agency and the absence of revenue from certain known one-time projects in 2025. Annual subscription revenue was 57.4% of total revenue, up from 57.2% in Q1 of last year and also up from 54.2% in 2025. In total, subscription revenue was up 1.4% or down 2% on a currency-neutral basis. Our annual subscription revenue retention rate was 90% in the Q1 LTM period, compared to 92.7% in the corresponding 2025 period.

The year-over-year change primarily reflects the absence of certain high-impact media events and certain one-time spend that occurred in the LTM 2025 period that did not recur in the LTM 2026 period. Active annual subscribers totaled 258,000 in the Q1 LTM period, compared to 318,000 in the corresponding 2025 period. This decline reflects our deliberate decision to discontinue the iStock free trial new customer acquisition program in June 2025. This was done to improve overall quality and economics. While the program contributed to higher gross subscriber volumes, free trial conversions consistently delivered lower revenue per subscriber, annual subscription renewal rates below 10%, and a less attractive customer lifetime value, which weighed on the per unit economics.

In addition, as mentioned by Craig, free trial did not play to our core strength—our differentiated high-quality content and coverage—but instead skewed towards lower engagement users that aligned more closely with the broader challenges observed outside of Getty Images Holdings, Inc. As we have discussed on previous calls, we expect to see the impacts of this discontinuation linger through to Q3. While we continue to navigate these impacts, we also continue to see stability in our subscriber counts and renewal rates across Getty Images and Unsplash Plus subscribers, where the quality and economics of the subscribers remain strong. Paid downloads were 92.2 million, essentially flat year over year.

Creative revenue was $126.2 million, down 4.5% year over year and 8% on a currency-neutral basis. Within Creative, our custom content solution continued to perform well, supported by growth in video and custom AI, up over 250% year over year, as well as our Unsplash Plus subscription, now in its fourth year, still with year-over-year growth of approximately 20%. This growth was offset by a few items. First, we had a 380 basis point negative impact on Creative revenue due to a shift in revenue allocation from Creative to Editorial, as we saw our Premium Access customers’ download consumption patterns shift to Editorial in the quarter, largely driven by our Olympics coverage.

Second, as Craig and I both mentioned, we continue to see a drag from Agency which sits almost entirely in Creative and was down 14% year over year. Finally, within iStock, traffic was adversely impacted by two factors: first, the planned exit from a longstanding affiliate partnership to better optimize efficiency of our marketing spend; and second, internal changes that temporarily impacted our search engine rankings. We have since course-corrected, and while normalization will take some time, we do not expect a material impact to the remainder of the year.

Editorial revenue was $91.7 million, up 11% year over year and 7.1% on a currency-neutral basis, driven by strong demand for global sports coverage, including the Milan Cortina Winter Olympics, entertainment events, and continued strength in our archive. The revenue allocation impacts I just mentioned that negatively impacted Creative revenue conversely contributed 620 basis points to Editorial growth in the quarter. Other revenue was $8.6 million compared to $9.3 million in Q1 2025. Revenue less our cost of revenue as a percentage of revenue was 70.8% compared with 73.1% in Q1 2025. The decrease is mainly due to product mix and timing elements as well as higher costs in the quarter tied to our event coverage.

SG&A expense was $102.2 million, or 45.1% of revenue, compared to 43.9% last year. Excluding stock-based compensation, SG&A was $98.8 million in the quarter, or 43.6% of revenue, compared to 41.8% of revenue in Q1 2025. The increase primarily relates to incentive compensation and annual merit increases, elevated Olympics-related coverage expenses, and professional fees, partially offset by lower marketing spend. Adjusted EBITDA was $61.6 million for the quarter, down 12.2% or 15.2% on a currency-neutral basis.

Adjusted EBITDA margin was 27.2% compared to 31.3% in Q1 2025, primarily due to higher cost of revenue and SG&A impacts which we expect to normalize over the balance of the year, with our adjusted EBITDA margins expected to return to a typical approximate 30% range. CapEx was $16.1 million, or 7.1% of revenue, consistent with our expected range of 5% to 7%. Adjusted EBITDA less CapEx was $45.5 million, down 16.3% or 19.4% on a currency-neutral basis. Adjusted EBITDA less CapEx margin was 20.1% compared to 24.3% in Q1 2025. Free cash flow improved to $24 million in Q1, compared with negative $300,000 in 2025.

The improvement was driven by lower cash interest paid and lower merger cost cash outflows, as well as working capital changes related to the timing of receivables and payables. Free cash flow is stated net of cash interest expense of $26.3 million and cash taxes paid in the quarter of $7.1 million. We ended the quarter with $90.6 million of balance sheet cash, up $6.5 million from Q4 2025. This sequential increase was driven by free cash flow generation, partially offset by a $6.5 million amortization payment on our euro term loan and the impact of foreign exchange rates.

It is worth noting that since the start of 2025, our cash position has been significantly burdened by nearly $115 million of total one-time expenses, with those costs driven by our merger process, refinancing transactions, AI-related litigation, and our accelerated SOX compliance efforts. The material nature of these expenses is now largely behind us, and we are confident that we will return to healthier levels of free cash flow generation that we have historically seen.

As of March 31, we had total debt outstanding of $1.99 billion, which included $628 million of 10.5% senior secured notes issued in Q4 to fund our pending merger, with the proceeds currently held in escrow; $540 million of 11.25% senior secured notes; $481 million of euro term loan converted using exchange rates as of 03/31/2026 with an applicable rate of 8.19%; $295 million of 14% senior unsecured notes; $40 million of USD term loan at an 11.25% fixed rate; and $5 million of 9.75% senior unsecured notes.

While our $150 million revolver remained undrawn at quarter end, on April 22, following the Second Circuit Court’s denial of our petition for rehearing in the ALTA and CR warrant litigation, we drew $120 million and used a portion of the proceeds to pay the approximately $110.9 million judgment and associated interest. We also received approximately $30 million from insurance carriers following the payment. Considering the foreign exchange rates, applicable interest rates, and mandatory amortization on our debt balances as of March 31, and the subsequent revolver drawdown at an applicable interest rate of 7.8%, our estimated cash interest for 2026, net of interest earned on cash held in escrow, is $194 million.

This estimate reflects the first cash interest payment in May related to the $628 million of merger financing currently held in escrow, with a second payment due on the merger outside end date of October 6. Now turning to our outlook. Given some of the strong business fundamentals that Craig and I just touched on, our full year revenue and adjusted EBITDA guidance remain unchanged. We continue to expect revenue of $948 million to $988 million, down 3.4% to up 0.6% year over year and down 4.5% to up 0.5% currency neutral.

We continue to expect adjusted EBITDA of $279 million to $295 million, down 12.9% to 8.1% year over year and down 13.9% to 9.1% currency neutral, with our outlook for our adjusted EBITDA margins at just about 30%. Using our current FX rate assumptions, the euro at 1.17 and the GBP at 1.34, we expect approximately $11 million of revenue tailwind for the full year, with $8 million realized in Q1 and the remainder largely in the first half. On adjusted EBITDA, FX represents roughly a $3.6 million full year benefit, including $2.5 million realized in Q1 with the remainder similarly weighted toward the first half of the year.

As a reminder, the expected year-over-year decline in revenue and adjusted EBITDA continues to be driven primarily by the timing of revenue recognition related to the two large multiyear licensing agreements we signed in 2025. The accelerated revenue recognized last year creates a difficult comparison in 2026, particularly in the fourth quarter, and more than offsets the benefit we would otherwise expect from the even-year editorial calendar in 2026. To put that dynamic into context, excluding the approximate $40 million of accelerated revenue recognized in Q4 2025, our fiscal 2026 revenue outlook would reflect underlying growth of 0.7% to 4.9% year over year, or down 0.5% to up 3.7% on a currency-neutral basis.

On that same basis, adjusted EBITDA would be down 2.4% to up 2.9%, or down 3.6% to up 1.7% on a currency-neutral basis. The key takeaway is that, absent these unusually challenging year-over-year timing comparisons, we continue to expect solid growth across our core business. On the cost side, our guidance includes approximately $6.9 million in one-off increases in SG&A as we continue our accelerated SOX compliance efforts. This is up from $5.6 million in our prior guidance with offsetting reductions in other SG&A expenses. All other merger-related costs are excluded from this guidance, as they are considered one time in nature and therefore are excluded from adjusted EBITDA.

Finally, while our guidance reflects the trends and information available to us as of today, any broader impacts that could result from changes in global macroeconomic conditions remain uncertain and may not be fully reflected in this outlook. We will now open the call for questions.

Operator: Thank you. If you would like to ask a question, please press star then 1 on your keypad. To leave the queue at any time, press 2. Once again, that is star and 1 to ask a question. We will take our first question from Ron Josey with Citi. Please go ahead. Your line is open.

Ron Josey: Great, thanks for taking the question. Jennifer, I wanted to ask a little bit more on guidance and the revenue split between Creative and Editorial. Given the trends we saw in Q1, I wanted to ask specifically about the confidence in full year guidance, which was maintained, and the drivers behind that confidence. And then can you remind us again about the delta or some of the moves between Creative and Editorial? And then, Craig, on the acquisition, you mentioned a final decision in June. Just talk to us about next steps or what we can expect here going forward. Thank you.

Craig Peters: I will start on the acquisition, then leave the guidance and the revenue split to Jennifer. Thanks, Ron, for the questions. On the acquisition front, we are down to the U.K. We have been unconditionally cleared for the transaction in every other jurisdiction. The CMA’s process has an end date. They have already gone through their extension and have an end date of June 14. So we expect on or before that date to hear back in terms of their finding with respect to what they term an SLC, a significant lessening of competition, within the Editorial space or not, and what they would require with respect to a remedy if they find it.

We will have knowns on those fronts by then, and then we can determine whether that remedy is one that is acceptable to the parties and one that the parties can deliver. It has been a long road. We have spent a decent amount of capital in pursuit of this. We continue to pursue it because we believe in the value creation unlocked by this merger. We do not agree with any lessening of competition in the marketplace. It is unfortunate that at this point we are down to looking at a business in the U.K. that is, you know, £3.5 million of revenue that is at question here.

That is the size, per the Shutterstock Q1 10-Q, of the amount of revenue actually at question, relative to roughly $2 billion of revenue between the transactions. But the good news is we are seeing the light at the end of the tunnel, and we should have clarity on where they stand with respect to both that SLC—whether it exists or does not—and then what would or would not be required in order to remedy that. Jennifer, you want to pick up on the guidance and the revenue splits?

Jennifer Leyden: Yes. I will start with the normalization. You might remember we have talked about this before, specifically when we have a big Editorial event calendar. Q1 for us was the bigger quarter for Editorial with the Milan Olympics and also political spend in the quarter. We have talked about this before, primarily in Premium Access, which is our largest subscription, that has Editorial and Creative. In these periods with big events, it is really nothing more than customers shifting some of their download consumption patterns in favor of Editorial content, and you can imagine why in the case of spectacular imagery coming out of Milan.

For Q1, the impact of that download and revenue allocation mix was a drag on Creative of about 375 basis points and then a lift on Editorial of just over 100 basis points. We will see a bit of that as we continue through what is a big Editorial year for us—certainly as we go into the World Cup—and as we expect to see some political lift heading into the U.S. midterms towards the end of the year.

Ron Josey: It does in terms of the mix, and then your comment towards the end of the year helps to talk to the guidance side.

Jennifer Leyden: The key thing to remember is, hopefully you got the message from Craig’s and my prepared remarks, the strong fundamentals of the business really have not changed. When we talk about things like Corporate being a solid upper mid-single-digit growth driver, the subscription business growing, custom content having its biggest quarter it has ever had since we rolled that solution out several years ago, and continued growth in Unsplash, we are still seeing all of the good fundamentals in this business. When you look at Q1, the big storylines for revenue are really the revenue recognition impact—our accounting item 606.

That had a bigger drag on Q1 revenue, but we expect to see the 606 impact for the year end up where we expected it to be in our prior guidance. So a timing element in Q1, but no change to the full year impact from that item. As we think about what sits within guidance, nothing is really different than what we spoke to last quarter with 2026 guidance: Creative roughly a low single-digit decline, Editorial roughly flat, and Other would be a mid-single-digit decline. A lot of those declines are because of that big, chunky revenue we got in Q4 of last year.

Normalizing that gets Creative to about flat, Editorial to low single-digit growth, and Other revenue back up into double-digit growth. Costs are in line with what we spoke to previously. It was a lower-margin quarter for us, but on the gross margin side that is really a function of the 606 revenue recognition element as well as a bit of product mix. We expect by the time we get to H2 to be back up in the 71% range in gross margin, and we should see our EBITDA margins in the second half of the year get back up into the 29% to 30% range.

Ron Josey: Perfect. Thank you, Jennifer. Thank you, Craig.

Operator: Thank you. We will move next to Mark Zgutowicz with Benchmark. Please go ahead. Your line is open.

Mark Zgutowicz: Thank you. Good evening, Craig and Jennifer. A couple for you, Craig, and then a couple for Jennifer, if I could. Craig, on the 2026 guidance, can you maybe update us on your willingness to sign AI licensing deals that are predicated within that guidance? And how should we be thinking about recurring revenue opportunities tied to AI content licensing materializing over the next 12 months or so, as opposed to just pure licensing deals? And then you also mentioned in your prepared remarks about rightsizing Agency support, now that the segment is roughly 15% of revenue. Does that mean OpEx savings or redistributed headcount to other parts of your business?

And then, Jennifer, what was Premium Access net dollar retention in Q1 and whether you expect an improving NDR in Q2 as predicated within your 2026 guidance? Also tied to NDR, how would you characterize iStock and Unsplash headwinds there? Are they the same, or are you potentially seeing lessening headwinds? Thank you.

Craig Peters: Great, thanks, Mark. I will pick up on the AI topic with respect to 2026, then touch on some of the iStock elements and Agency, and then pass over to Jennifer. On the AI licensing front, we do some level of AI licensing across the business. We did very little in Q1. We expect that to probably be more of a second-half contributor to the revenue pie. It has not been as sizable in terms of revenue stream for Getty Images Holdings, Inc. compared to others in the marketplace. We have been more selective in the licensing we have done.

We are more focused on integrating our product into large language models and AI experiences, where drawing on the history represented in our archive or the coverage represented in our Editorial offering is an important element of delivering context and accuracy to those individuals using these AI services. We referenced Perplexity and other deals that have yet to be named, and that continues to be our focus—how we embed Getty Images Holdings, Inc. and the quality of its coverage and imagery and the depth of its archive into those models. So yes, we will do some limited AI licensing. Again, that was very low in Q1; we expect more of that to phase toward the second half.

But we are really focused on those integrations into the platforms themselves, which is very akin to how our content is used today across third-party licensing. There can be some acceleration of that given 606, as Jennifer mentioned, but it is still fundamentally content licensing—we are using our content to deliver to our customers so they can produce a more compelling service. On Agency, yes, we have both sales and service headcount in support of agencies. They tend to be very transaction-driven, which has equated to a higher level of sales and service for that segment relative to other segments that might be more annual or multiyear agreements.

We did do a small layoff in Q1 to align resources with the volume coming in and the declines we have seen. We will continue to manage that segment accordingly. We did not redeploy that headcount across the balance of the organization. Within iStock, some context: our iStock business is different than generally what would be termed the MicroStock or MidStock space. More than 70% of our revenues come from Signature content, which is our exclusive content. About two-thirds of the business sits in subscriptions—annual and monthly. We are making changes based on what we are seeing in the market more broadly and the strength on the Signature side.

We see about 2x annual spend for a Signature customer relative to an Essentials customer, and we make about 3x the revenue overall. We also see fundamentally different cohort value downstream. It is not just year one—the retention value of the Signature customer is much higher than Essentials. Free trial subscribers had less than 10% retention, and those free trials largely accrued to our Essentials subscription. Some of this is due to changes in Google’s algorithm pointing towards AI searches, which has a knock-on effect on free websites that used to drive traffic to us on an affiliate basis, and also the proliferation of AI.

We are seeing the durability of Signature relative to those search dynamics, relative to consumption, and relative to AI. So we are making a conscious shift to focus iStock more aggressively on those quality-conscious customers at much higher economics. That means our accounts go down in terms of subscriber and purchasing customer counts, but ultimately that is going to pay out in our revenue retention.

Jennifer Leyden: Hi, Mark. On the retention question, we are at 90% in Q1 for annual subscription revenue retention. As we have spoken to previously, free trial subscription cancellations continue to be a drag on this rate, and we expect to see that drag lap the discontinuation of that program in Q2 and probably into Q3. Once we get into Q3, certainly Q4, we expect this metric to improve by roughly 2 to 3 points as that noise comes out of the metric. In addition, regarding Premium Access, there is a bit of a drag when subscribers spend outside of their subscription in a prior period for big events—Editorial or one-time events. We have about a 2-point year-over-year drag from that.

Key here, though: Premium Access, our largest subscription, had a 100% retention rate in Q1. iStock annuals are around the 80% range, and Unsplash is well over 90% retention. So while we report 90% overall, which still has the free trial drag and a bit of timing, the underlying stats are very healthy.

Mark Zgutowicz: Got it. Thanks, Jennifer. Craig, appreciate it.

Operator: Thank you. This concludes our Q&A session. I will now turn the call over to Steven Kanner for closing comments.

Steven Kanner: Thank you again for joining us today and for your continued interest in Getty Images Holdings, Inc. As always, our team is available to follow up on any additional inquiries you may have after the call. We look forward to staying connected and updating you on our progress in the quarters ahead. Have a great rest of your day.

Operator: Thank you. And this brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.