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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022

☐ 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 ☒ No ☐

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 ☒ No ☐

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. ☐

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

As of November 10, 2022, 394,771,254 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 September 30, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	2
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021	3
	Condensed Consolidated Statements of Redeemable Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	46

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	47
Item 6.	Exhibits	48
Signatures		49

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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 website;

●

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 its business strategy;

●

our inability to effectively manage our growth;

●

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 risk that our operations in and continued expansion into international markets bring additional business, political, regulatory, operational, financial and economic risks;

●

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 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 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;

●

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;

●

the ability to recognize the anticipated benefits of our business combination with CC Neuberger Principal Holdings II, which may be affected by, among other things, competition and our ability to grow our business and manage growth profitably;

●

changes in applicable laws or regulations;

●

risks associated with our reliance on information technology in critical areas of our operations;

●

costs related to operating as a public company; and

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●

those factors discussed under the heading “Risk Factors” in our Registration Statement on Form S-1 (File No. 333-266686), declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on September 15, 2022 (the “S-1 Registration Statement”), and in our other filings with the SEC.

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 “Risk Factors” in the S-1 Registration Statement and in our other filings with the SEC. The risks described under the heading “Risk Factors” in the S-1 Registration Statement 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)


	September 30,		December 31,
	2022		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	71,869	$	186,301
Restricted cash		4,533		5,228
Accounts receivable – net of allowance of $5,983 and $5,946		124,509		143,362
Prepaid expenses		11,864		12,778
Taxes receivable		2,644		11,992
Other current assets		8,986		15,368
Total current assets		224,405		375,029
PROPERTY AND EQUIPMENT – NET		163,659		170,896
RIGHT OF USE ASSETS		48,318		—
GOODWILL		1,497,843		1,503,245
IDENTIFIABLE INTANGIBLE ASSETS – NET		408,743		478,852
DEFERRED INCOME TAXES – NET		7,785		8,893
OTHER LONG-TERM ASSETS		50,257		41,092
TOTAL	$	2,401,010	$	2,578,007
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	89,443	$	94,993
Accrued expenses		48,339		66,569
Income taxes payable		1,307		10,502
Short-term debt – net		—		6,481
Deferred revenue		163,220		167,550
Total current liabilities		302,309		346,095
LONG-TERM DEBT – NET		1,392,422		1,750,990
LEASE LIABILITIES		47,252		—
DEFERRED INCOME TAXES – NET		43,960		24,595
UNCERTAIN TAX POSITIONS		37,355		42,701
OTHER LONG-TERM LIABILITIES		7,424		26,961
Total liabilities		1,830,722		2,191,342
Commitments and contingencies (Note 12)
REDEEMABLE PREFERRED STOCK:
Redeemable Preferred Stock, $0.01 par value, 900,000 shares authorized, 677,484 shares outstanding at December 31, 2021 (aggregate liquidation preference of $685,350). No shares were issued or outstanding at September 30, 2022.		—		685,350
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred Stock, $0.0001 par value; 1.0 million shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021.		—		—
Class A common stock, $0.0001 par value: 2.0 billion shares authorized; 394.8 million shares issued and outstanding as of September 30, 2022 and 196.1 million shares issued and outstanding as of December 31, 2021		39		20
Class B common stock, $0.0001 par value: 5.1 million shares authorized; no shares issued and no shares outstanding as of September 30, 2022 and December 31, 2021.		—		—
Additional paid-in capital		1,926,489		935,082
Accumulated deficit		(1,259,427)		(1,203,440)
Accumulated other comprehensive loss		(145,182)		(78,403)
Total Getty Images Holdings, Inc. stockholders’ equity (deficit)		521,919		(346,741)
Noncontrolling interest		48,369		48,056
Total stockholders’ equity (deficit)		570,288		(298,685)
TOTAL	$	2,401,010	$	2,578,007

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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
REVENUE	$	230,474	$	237,021	$	694,778	$	679,635

OPERATING EXPENSE:
Cost of revenue (exclusive of depreciation and amortization shown separately below)		64,040		62,598		191,052		183,142
Selling, general and administrative expenses		91,571		94,459		280,255		273,929
Depreciation		12,407		12,720		37,298		38,551
Amortization		11,566		12,471		35,676		37,025
Other operating expense (income) – net		532		(223)		4,096		(373)
Operating expense		180,116		182,025		548,377		532,274
INCOME FROM OPERATIONS		50,358		54,996		146,401		147,361

OTHER EXPENSE, NET:
Interest expense		(29,397)		(31,006)		(88,983)		(92,173)
Gain on fair value adjustment for swaps and foreign currency exchange contract – net		5,672		3,728		22,777		12,493
Unrealized foreign exchange gains – net		33,671		14,243		71,905		26,922
Loss on extinguishment of debt		(2,693)		—		(2,693)		—
Net loss on fair value adjustment for warrant liabilities		(161,339)		—		(161,339)		—
Other non-operating (expense) income – net		(3,763)		157		(3,408)		457

Total other expense – net		(157,849)		(12,878)		(161,741)		(52,301)
(LOSS) INCOME BEFORE INCOME TAXES		(107,491)		42,118		(15,340)		95,060
INCOME TAX EXPENSE		(10,625)		(8,489)		(38,974)		(19,162)

NET (LOSS) INCOME		(118,116)		33,629		(54,314)		75,898
Less:
Net (loss) income attributable to noncontrolling interest		(62)		113		313		254
Premium on early redemption of Redeemable Preferred Stock		26,678		—		26,678		—
Redeemable Preferred Stock dividend		4,666		18,227		43,218		52,653
NET (LOSS) INCOME ATTRIBUTABLE TO GETTY IMAGES HOLDINGS, INC.	$	(149,398)	$	15,289	$	(124,523)	$	22,991

Net (loss) income per share attributable to Class A Getty Images Holdings, Inc. common stockholders:
Basic	$	(0.47)	$	0.08	$	(0.52)	$	0.12
Diluted	$	(0.51)	$	0.08	$	(0.59)	$	0.12

Weighted-average Class A common shares outstanding:
Basic		318,152,726		196,082,512		237,235,059		196,082,512
Diluted		323,337,894		197,523,619		238,963,448		197,238,936

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
NET (LOSS) INCOME		(118,116)		33,629		(54,314)		75,898
OTHER COMPREHENSIVE LOSS:
Net foreign currency translation adjustment losses		(33,416)		(13,529)		(66,779)		(22,284)
COMPREHENSIVE (LOSS) INCOME		(151,532)		20,100		(121,093)		53,614
Less: Comprehensive (loss) gain attributable to noncontrolling interest		(61)		114		313		253
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO GETTY IMAGES HOLDINGS, INC.	$	(151,471)	$	19,986	$	(121,406)	$	53,361

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands except share amounts)

(unaudited)


																Total
														Accumulated		Getty Images
	Redeemable									Additional				Other		Holdings, Inc.				Total
	Preferred Stock			Class A Common Stock			Class B Common Stock			Paid-In		Accumulated		Comprehensive		Stockholders’		Noncontrolling		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Equity (Deficit)		Interest		Equity (Deficit)
BALANCE — December 31, 2021	677,484	$	685,350	153,313,505	$	1,533	—	$	—	$	933,569	$	(1,203,440)	$	(78,403)	$	(346,741)	$	48,056	$	(298,685)
Retroactive application of recapitalization				42,781,797		(1,513)					1,513						—				—
BALANCE — December 31, 2021, after effect of recapitalization (Note 3)	677,484	$	685,350	196,095,302	$	20	—	$	—	$	935,082	$	(1,203,440)	$	(78,403)	$	(346,741)	$	48,056	$	(298,685)
Net loss													24,899				24,899		208		25,107
Other comprehensive income	—		—	—		—	—		—		—		—		(3,878)		(3,878)		(1)		(3,879)
Cumulative effect of accounting change- adoption of ASU 2019-12 (see Note 2)	—		—	—		—	—		—		—		(1,360)		—		(1,360)		—		(1,360)
Issuance of common stock in connection with option exercises	—		—	11,991		—	—		—		29		—		—		29		—		29
Equity-based compensation activity	—		—	—		—	—		—		1,741		—		—		1,741		—		1,741
Redeemable Preferred Stock dividend	18,631		18,847	—		—	—		—		(18,847)		—		—		(18,847)		—		(18,847)
BALANCE — March 31, 2022	696,115	$	704,197	196,107,293	$	20	—	$	—	$	918,005	$	(1,179,901)	$	(82,281)	$	(344,157)	$	48,263	$	(295,894)
Net loss	—		—	—		—	—		—		—		38,528		—		38,528		167		38,695
Other comprehensive income	—		—	—		—	—		—		—		—		(29,485)		(29,485)		—		(29,485)
Equity-based compensation activity	—		—	—		—	—		—		1,390		—		—		1,390		—		1,390
Redeemable Preferred Stock dividend	19,478		19,705	—		—	—		—		(19,705)		—		—		(19,705)		—		(19,705)
BALANCE — June 30, 2022	715,593	$	723,902	196,107,293	$	20	—	$	—	$	899,690	$	(1,141,373)	$	(111,766)	$	(353,429)	$	48,430	$	(304,999)
Net loss	—		—	—		—	—		—		—		(118,054)		—		(118,054)		(62)		(118,116)
Other comprehensive income	—		—	—		—	—		—		—		—		(33,416)		(33,416)		1		(33,415)
Issuance of common stock in connection with option exercises	—		—	1,555,961		—	—		—		120		—		—		120		—		120
Common shares withheld for settlement of taxes in connection with equity-based compensation	—		—	(679,914)		—	—		—		(6,267)		—		—		(6,267)		—		(6,267)
Equity-based compensation activity	—		—	—		—	—		—		2,806		—		—		2,806		—		2,806
Redeemable Preferred Stock dividend	—		4,666	—		—	—		—		(4,666)		—		—		(4,666)		—		(4,666)
Premium on early redemption of Redeemable Preferred Stock	—		26,678	—		—	—		—		(26,678)		—		—		(26,678)		—		(26,678)
Redemption of Redeemable Preferred Stock for cash and share consideration	(715,593)		(755,246)	15,000,000		2	—		—		140,248		—		—		140,250		—		140,250
Issuance of Class A and Class B common stock upon Business Combination and PIPE Investment, net	—		—	107,068,311		10	5,140,000		1		688,269		—		—		688,280		—		688,280
Issuance of Class A common stock upon exercise of Private Placement Warrants	—		—	11,555,996		1	—		—		232,852		—		—		232,853		—		232,853
Issuance of Class A common stock upon exercise of Public Warrants	—		—	10,201		—	—		—		121		—		—		121		—		121
Issuance of Class A common stock upon vesting of Earn-out shares	—		—	58,999,956		6	—		—		(6)		—		—		—		—		—
Conversion of Class B common stock to Class A common Stock	—		—	5,140,000		—	(5,140,000)		(1)		—		—		—		(1)		—		(1)
BALANCE — September 30, 2022	—	$	—	394,757,804	$	39	—	$	—	$	1,926,489	$	(1,259,427)	$	(145,182)	$	521,919	$	48,369	$	570,288

See notes to unaudited condensed consolidated financial statements.

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GETTY IMAGES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands except share amounts)

(unaudited)

Total

Accumulated

Getty Images

Redeemable

Additional

Other

Holdings, Inc.

Total

Preferred Stock

Class A Common Stock

Class B Common Stock

Paid-In

Accumulated

Comprehensive

Stockholders’

Noncontrolling

Stockholders’

Shares

Amount