What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-25 · 113 added, 131 removed, 528 unchanged (32% of the section changed)

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(b) A number of shares of Getty Images common stock equal to the product of 9.17 multiplied by the number of shares of Shutterstock common stock outstanding immediately prior to the transaction close (including vested Shutterstock restricted stock units and performance stock units).

Each holder of Shutterstock common stock immediately prior to the transaction close will have the option to receive, subject to proration, for each share of Shutterstock common stock held by such holder:

(a) Cash consideration of $9.50 and 9.17 shares of Getty Images common stock;

Each holder of shares of Shutterstock common stock immediately prior to the transaction close will have the option to receive, subject to proration, for each share of Shutterstock common stock held by such holder:

(a) Cash consideration of $9.50 and 9.17 shares of Getty Images common stock (a “Mixed Election”);

(b) Cash consideration of $28.8487;

The Merger is subject to the satisfaction of customary closing conditions, further described below, including receipt of required regulatory approvals, the approval of Getty Images and Shutterstock stockholders and the extension or refinancing of Getty Images’ existing debt obligations.

If no election is made by a holder, each of such holder’s shares of Shutterstock common stock shall be treated as having made a Mixed Election.

A majority of Shutterstock stockholders approved the adoption of the Merger Agreement at a special meeting of stockholders held on June 10, 2025 (the “ Shutterstock Stockholder Approval ”).

The Merger is subject to the satisfaction of customary closing conditions, further described below, including receipt of required regulatory approvals.

Subject to the satisfaction of the closing conditions, upon closing of the Merger, Shutterstock’s common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended.

The closing of the Merger is subject to the satisfaction or waiver of certain closing conditions, including:

• adoption of the Merger Agreement by Shutterstock stockholders (the “ Shutterstock Stockholder Approval ”) and the Getty Images Stockholder Approval, which condition was subsequently satisfied by the Getty Images Stockholder Written Consent,

• Getty Images’ registration statement on Form S-4 to be filed in connection with the Merger having become effective and the mailing of an information statement to Getty Images stockholders at least 20 business days prior to the closing,

• the Shutterstock Stockholder Approval, which condition was subsequently satisfied as described above, and the Getty Images stockholder approval, which condition was subsequently satisfied by the Getty Images stockholder written consent;

• absence of any order, injunction or other order or law in certain jurisdictions prohibiting the Merger or making the closing of the Merger illegal;

• expiration of the applicable waiting period (and extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other regulatory approvals deemed necessary or advisable,

Competition and Markets Authority (the “CMA”).

On April 2, 2025, the Company and Getty Images each received a Request for Additional Information and Documentary Material from the U.S.

Department of Justice (“DOJ”) in connection with the Merger and on November 3, 2025, the Company announced that the CMA has referred the Merger to a Phase 2 review process.

The Company remains committed to the proposed Merger and will continue to engage with the DOJ and the CMA and work with Getty Images to expeditiously secure the necessary clearances;

• shares of Getty Images common stock to be issued in connection with the Merger having been approved for listing on the NYSE;

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• performance and compliance in all material respects of each party’s agreements and covenants under the Merger Agreement;

• absence of any Getty Images material adverse effect or Shutterstock material adverse effect, as applicable and subject to the definition thereof in the Merger Agreement,

• delivery of an opinion of tax counsel that the Second Merger and the Third Merger as defined in the Merger Agreement, taken together, will qualify as a “reorganization” within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended, and

• Getty Images having amended or otherwise refinanced its existing term loans and senior notes to extend the maturity of each to no earlier than February 19, 2028 (the “ Existing Debt Modifications ”).

• absence of any Getty Images material adverse effect or Shutterstock material adverse effect, as applicable and subject to the definitions thereof in the Merger Agreement;

• Getty Images having amended or otherwise refinanced its existing term loans and senior notes to extend the maturity of each to no earlier than February 19, 2028.

On September 18, 2025, the Company and Getty Images agreed to waive this condition such that it is no longer a condition to the Merger.

Overview and Other Recent Developments

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Shutterstock, our flagship brand, includes various content types such as image, footage, music and editorial.

For customers seeking specialized solutions, Shutterstock Studios extends our offerings by providing custom, high-quality content matched with production tools and services at scale.

Pond5 is a video-first content marketplace which expands the Company’s content offerings across footage, image and music.

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Bigstock maintains a separate content library tailored for creators seeking to incorporate cost-effective imagery into their projects.

Our Offset brand provides authentic and exceptional content for high-impact use cases that require extraordinary images, featuring work from top assignment photographers and illustrators from around the world.

Over 4.0 million active, paying customers contributed to our revenue in 2024.

Our contributors made their images, footage and music tracks available in our collection, which has grown to 800 million images and 59 million footage clips as of December 31, 2024.

This makes our collection of content one of the largest of its kind, and we delivered 134.3 million paid downloads to our customers across all of our brands during the year ended December 31, 2024.

Envato enhances digital creative assets and templates.

Contributors of Content typically earn a royalty each time their work is licensed.

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Subscribers, subscriber revenue and average revenue per customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination.

Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, and for Average Revenue per Customer, from Giphy beginning July 2024.

These metrics exclude the respective counts and revenues from Backgrid and Envato.

Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, from Backgrid beginning February 2025, and for Average Revenue per Customer, from Giphy beginning July 2024.

2025 metrics include the counts and revenues from Envato, which was acquired in July 22, 2024.

We define subscribers as those customers who purchase one or more of our monthly recurring products for a continuous period of at least three months, measured as of the end of the reporting period.

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Year Ended December 31,

Shutterstock 1

2024 2024 2024 2023 2022

Subscribers (end of period) 1

1,032,000 1,088,000 523,000

Subscriber revenue (in millions) 1

$ 429.8 $ 452.6 $ 351.5

Average revenue per customer (last twelve months) 1

$ 281 $ 255 $ 412

Paid downloads (in millions) 453.1 456.7 153.0

___________________________________________________

1 Represents Shutterstock, Inc.

key operating metrics before combining the Envato related metrics.

1 Subscribers, Subscriber Revenue and Average Revenue Per Customer from acquisitions are included in these metrics beginning twelve months after the closing of the respective business combination.

These metrics exclude the respective counts and revenues from our acquisitions of Backgrid and Envato.

2 Envato Subscribers and Subscriber Revenue are presented as if Envato was acquired as of the beginning of the period presented, and represent metrics incremental to amounts presented under the “Shutterstock, Inc.” heading.

Envato Average revenue per customer is derived from Envato historical results over the last twelve months.

3 The Pro Forma key operating metrics are derived from (i) the Shutterstock amounts before combining with Envato and (ii) the historical Envato metrics, as discussed in footnote 2 above.

Accordingly, the metrics include Subscribers, Subscriber revenue, and Average revenue per customer from Pond5 and Splash News beginning May 2023, Backgrid beginning February 2025, and, for Average Revenue per Customer, from Giphy beginning July 2024.

2025 metrics include the counts and revenues from Envato, which was acquired in July 22, 2024.

2 Subscribers and Subscriber Revenue are presented as if Envato was acquired as of the beginning of the period presented.

Average revenue per customer includes Envato historical results over the last twelve month period.

Basis of Presentation

A significant portion of our revenues are earned from licensing content.

Content licenses are generally purchased on a monthly or annual basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download.

Content licenses are generally purchased on a monthly or annual basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a

specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download.

We also generate revenue from tools made available through our platform.

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General and administrative expenses include employee compensation, including non-cash equity-based compensation, bonuses and benefits for executive, finance, accounting, legal, human resources, internal information technology, internet security, business intelligence and other administrative personnel.

In addition, general and

administrative expenses include outside legal, tax and accounting services, bad debt expense, insurance, facilities costs, other supporting overhead costs and depreciation and amortization expense.

Impairment of Lease and Related Assets .

Impairment of lease and related assets includes impairment charges related to a portion of the Company’s right-of-use assets and property and equipment triggered by the decision to cease using certain office spaces.

In addition, general and administrative expenses include outside legal, tax and accounting services, bad debt expense, insurance, facilities costs, other supporting overhead costs and depreciation and amortization expense.

Bargain Purchase Gain .

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Interest expense consists of interest on our debt and amortization of deferred financing fees.

Other Income / (Expense), Net.

Other income / (expense), net consists of non-operating costs such as foreign currency transaction gains and losses, in addition to unrealized gains and losses on investments and interest income and expense.

Other Income, Net.

Other income, net consists of non-operating costs such as foreign currency transaction gains and losses, in addition to unrealized gains and losses on investments and interest income and expense.

Income Taxes.

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General and administrative 198,010 159,136 142,646

Impairment of lease and related assets — — 18,664

Total operating expenses 914,866 866,554 806,187

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Interest expense (16,826) (10,561) (1,857)

Other income / (expense), net 4,401 5,664 (1,251)

Other income, net 17,098 4,401 5,664

Income before income taxes 75,331 62,548 122,468

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General and administrative 20 % 17 % 16 %

Impairment of lease and related assets — % — % 2 %

Total operating expenses 92 % 93 % 92 %

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Interest expense (2) % (1) % — %

Other income / (expense), net — % 1 % — %

Other income, net 2 % — % 1 %

Income before income taxes 8 % 7 % 14 %

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Income from operations 75,059 68,708 6,351 9

Bargain purchase gain — 50,261 (50,261) *

Interest expense (16,826) (10,561) (6,265) 59

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Revenue increased by $54.7 million, or 6%, to $989.9 million in 2025 as compared to 2024.

Foreign currency fluctuations did not have a significant impact on our revenue in the year ended December 31, 2024.

On a constant currency basis, revenue increased approximately 5% in the year ended December 31, 2025, as compared to 2024.

Our Content revenues increased by 4%, to $786.7 million in 2025, as compared to 2024.

Foreign currency fluctuations did not have a significant impact on our Content license revenues in 2024.

The increase in our Content license revenues was driven by revenue from Envato, which was acquired on July 22, 2024.

On a constant currency basis, Content revenues increased approximately 2% in the year ended December 31, 2025, as compared to 2024.

The increase in our Content license revenues was driven by the contribution of Envato, which was acquired on July 22, 2024.

Our Data, Distribution, and Services revenues increased by 16%, to $203.3 million in 2025, as compared to 2024.

Foreign currency fluctuations did not have a significant impact on our Data, Distribution, and Services revenues in 2025.

The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which grew 15% in the twelve months ended December 31, 2024, as well as growth in our Distribution and Services offerings.

Data, Distribution, and Services revenues increased primarily from the sale and delivery of metadata to new and existing customers as well as growth in our Distribution and Services offerings.

Changes in our revenue by region were as follows:

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revenue from Europe increased by $19.0 million, or 8%, to $264.7 million;

and revenue from outside Europe and North America remained relatively flat, decreasing by $0.9 million to $214.9 million, in the year ended December 31, 2024 compared to 2023.

and revenue from outside Europe and North America increased by $1.2 million to $216.2 million, in the year ended December 31, 2025 compared to 2024.

Cost and Expenses

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Cost of revenue increased by $10.5 million, or 3%, to $406.8 million in 2025 as compared to 2024.

As a percent of revenue, cost of revenues increased to 42% for the year ended December 31, 2024, from 40% for 2023.

This increase was driven by increased royalty and content costs, costs associated with website hosting, hardware and software licenses, employee related costs, and depreciation and amortization driven by the acquisition of Envato.

As a percent of revenue, cost of revenues decreased to 41% for the year ended December 31, 2025, from 42% for 2024.

The increased costs were driven by increased royalty and content costs, costs associated with website hosting, hardware and software licenses, and employee related costs and depreciation and amortization driven by the acquisition of Envato.

These increases were partially offset by decreases in recurring and non-recurring Giphy Retention Compensation expenses.

We expect that our cost of revenue will continue to fluctuate in line with changes in revenue.

Sales and Marketing.

Sales and marketing expenses increased by $8.0 million, or 4%, to $222.7 million in 2024 as compared to 2023.

As a percent of revenue, sales and marketing expenses decreased to 24% for the year ended December 31, 2024, from 25% for the same period in 2023.This increase was driven by increases in employee-related costs, occupancy expenses, and other administrative expenses, partially offset by a decline in performance marketing spend and consulting expenses.

In addition, there were $4.3 million and $0.6 million increases from recurring and non-recurring Giphy Retention

Compensation, respectively.

Sales and marketing expenses decreased by $1.7 million, or 1%, to $221.0 million in 2025 as compared to 2024.

As a percent of revenue, sales and marketing expenses decreased to 22% for the year ended December 31, 2025, from 24% for the same period in 2024.

This decrease was driven by decreases in performance marketing and consulting expenses, partially offset by an increase in employee-related costs driven by the Envato business.

For the year ended December 31, 2025, the recurring and non-recurring Giphy Retention Compensation had no impact on Sales and Marketing

We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.

Product Development.

Product development expenses decreased by $7.7 million, or 8%, to $88.4 million in 2024 as compared to 2023.

The decrease in product development was driven by decreases in outside consultant expenses and employee-related costs.

This was partially offset by an increase in software licenses.

In addition, there was a $1.3 million increase and a $4.8 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Product development expenses increased by $0.6 million, or 1%, to $89.0 million in 2025 as compared to 2024.

The increase in product development was driven by increases in hardware and software licenses and employee-related costs driven by the acquisition of Envato.

This was partially offset by decreases of $2.6 million and $15.4 million from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

We expect product development expenses, of which a portion will be capitalized, to continue in the foreseeable future, as we pursue opportunities to invest in developing new products and internal tools and enhance the functionality of our existing products and technologies.

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General and administrative expenses increased by $38.9 million, or 24%, to $198.0 million in 2025 as compared to 2024.

The increase was driven by an increase in professional fees associated with the acquisitions of Envato and Backgrid, consisting of $7.6 million of transaction costs, and increases in employee-related costs and software licenses driven by the acquisition of Envato.

This was partially offset by a decrease in bad debt expense.

In addition, there was a $0.1 million decrease and a $2.6 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Bargain Purchase Gain .

In the twelve months ended December 31, 2023, we recognized a bargain purchase gain of $50.3 million related to the acquisition of Giphy, which represents the excess of the fair value of the net assets acquired in addition to the net negative purchase price.

The increase was driven by $34.9 million associated with the Getty merger, and increases in employee-related costs driven by the acquisition of Envato.

This was partially offset by a decrease in professional fees.

In addition, there was a $0.4 million increase and a $2.5 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Interest Expense .

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Other Income, Net.

During the twelve months ended December 31, 2024, other income, net substantially consisted of $4.1 million of interest income and $2.2 million of unrealized gains related to our investment in Meitu, Inc., partially offset by $1.8 million of unrealized foreign currency losses.

During the twelve months ended December 31, 2023, other income, net consisted of $4.8 million of interest income and $0.9 million of unrealized foreign currency gains.

During the twelve months ended December 31, 2025, other income, net substantially consisted of $3.7 million of interest income and $20.9 million of unrealized gains related to our investment in Meitu, Inc., partially offset by a $5.0 million expense related to the impairment of our long-term investment in an equity security, and $2.5 million of unrealized foreign currency losses.

During the twelve months ended December 31, 2024, other income, net consisted of $4.1 million of interest income and $2.2 million unrealized gains related to our investment in Meitu, Inc., partially offset by $1.8 million of unrealized foreign currency losses.

As we increase the volume of business transacted in foreign currencies resulting from international expansion and as currency rates fluctuate, we expect foreign currency gains and losses to continue to fluctuate.

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The 2025 effective tax rate differs from the U.S.

federal statutory tax rate primarily due to non-deductible equity compensation and a one-time charge for the foreign rate differential on acquired intangible assets, partially offset by the effect of the U.S.

Research and Development (“R&D”) tax credit and the foreign-derived intangible income deduction.

federal statutory tax rate primarily due to a Base Erosion anti- Abuse Tax (“BEAT”) tax liability and non-deductible equity compensation.

The 2024 effective tax rate differs from the U.S.

federal statutory tax rate primarily due to the non-taxable bargain purchase gain associated with the acquisition of Giphy, the effect of the U.S.

federal statutory tax rate primarily due to the non-deductible equity compensation and a one-time charge for the foreign rate differential on acquired intangible assets, partially offset by the effect of the U.S.

Research and Development (“R&D”) tax credit and the foreign-derived intangible income deduction.

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General and administrative 159,136 142,646 16,490 12

Impairment of long-lived assets — 18,664 (18,664) *

Total operating expenses 866,554 806,187 60,367 7

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Interest expense (10,561) (1,857) (8,704) 469

Other income / (expense), net 5,664 (1,251) 6,915 (553)

Other income, net 4,401 5,664 (1,263) (22)

Income before income taxes 62,548 122,468 (59,920) (49)

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Revenue increased by $60.7 million, or 7%, to $935.3 million in 2024 as compared to 2023.

On a constant currency basis, revenue increased approximately 5% in the year ended December 31, 2023, as compared to 2022.

Content license revenues decreased by 7%, to $737.3 million in 2023 as compared to 2022.

On a constant currency basis, Content revenues decreased by 7% in 2023, as compared to 2022.

The decline in our Content license revenues was driven by weakness in new customer acquisition, partially offset by increases in Pond5.

Pond5 contributed to revenues for the full year in 2023 compared to seven months in 2022.

Data, Distribution, and Services revenues increased by 256%, to $137.3 million in 2023 as compared to 2022.

Foreign currency fluctuations did not have a significant impact on our revenue in the year ended December 31, 2024, as compared to 2023.

Our Content revenues increased by 3%, to $760.0 million in 2024 as compared to 2023.

Foreign currency fluctuations did not have a significant impact on our revenue in 2024.

The increase in our Content license revenues was driven by revenue from Envato, which was acquired on July 22, 2024.

Our Data, Distribution, and Services revenues increased by 28%, to $175.3 million in 2024 as compared to 2023.

Foreign currency fluctuations did not have a significant impact on our Data, Distribution, and Services revenues in 2024.

The increase in Data, Distribution, and Services revenues was primarily driven by growth in our data offering, which accounted for $84.9 million of the growth from 2022 to 2023 and $10.5 million of revenue generated from Giphy.

Changes in our revenue by region were as follows:

revenue from North America increased by $74.5 million, or 21%, to $427.7 million, revenue from Europe decreased by $12.0 million, or 5%, to $231.0 million and revenue from outside Europe and North America decreased by $15.8 million, or 7%, to $215.8 million, in the year ended December 31, 2023 compared to 2022.

revenue from North America increased by $46.9 million, or 11%, to $474.7 million, revenue from Europe increased by $14.6 million, or 6%, to $245.7 million and revenue from outside Europe and North America remained relatively flat, decreasing by $0.9 million to $214.9 million, in the year ended December 31, 2024 compared to 2023.

Cost and Expenses

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As a percent of revenue, cost of revenues increased to 42% for the year ended December 31, 2024, from 40% for 2023.

This increase was primarily driven by:

(i) increased depreciation and amortization expense driven by our recent acquisitions;

(ii) increased royalty, content and reviewer costs;

(iii) higher costs associated with website hosting, hardware and software licenses;

and (iv) Giphy employee-related costs comprised of $4.9 million of recurring Giphy Retention Compensation and $4.3 million of non-recurring Giphy Retention Compensation.

We expect that our cost of revenue will continue to fluctuate in line with changes in revenue.

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Sales and marketing expenses increased by $8.0 million, or 4%, to $222.7 million in 2024 as compared to 2023.

As a percent of revenue, sales and marketing expenses was 25% for the years ended December 31, 2023 and 2022.

The increase in sales and marketing expenses was primarily driven by (i) $5.1 million in higher employee-related costs;

(ii) $3.1 million in higher consultant costs;

and (iii) Giphy employee-related costs comprised of $1.4 million of recurring Giphy Retention Compensation and $1.0 million of non-recurring Giphy Retention Compensation not considered necessary to operate our business.

As a percent of revenue, sales and marketing expenses decreased to 24% for the year ended December 31, 2024, from 25% for the same period in 2023.

This increase was driven by increases in employee-related costs, occupancy expenses, and other administrative expenses, partially offset by a decline in performance marketing spend and consulting expenses.

In addition, there were $4.3 million and $0.6 million increases from recurring and non-recurring Giphy Retention Compensation, respectively.

We expect sales and marketing expenses to continue to fluctuate as we optimize our sales channels and invest in new customer acquisition, products and geographies.

Product Development.

Product development expenses increased by $30.7 million, or 47%, to $96.2 million in 2023 as compared to 2022.

This increase was primarily driven by (i) Giphy employee-related costs comprised of $5.5 million of recurring Giphy Retention Compensation, net of capitalized labor and $20.9 million of non-recurring Giphy Retention Compensation not considered necessary to operate our business and (ii) $2.8 million in higher non-cash compensation expense.

Product development expenses decreased by $7.7 million, or 8%, to $88.4 million in 2024 as compared to 2023.

The decrease in product development was driven by decreases in outside consultant expenses and employee-related costs.

This was partially offset by an increase in software licenses.

In addition, there was a $1.3 million increase and a $4.8 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

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General and administrative expenses increased by $16.5 million, or 12%, to $159.1 million in 2024 as compared to 2023.

This increase was primarily driven by (i) $7.9 million in lower non-cash compensation expense and (ii) Giphy employee-related costs comprised of $1.8 million of recurring Giphy Retention Compensation, net of capitalized labor and $5.4 million of non-recurring Giphy Retention Compensation not considered necessary to operate our business.

These increases were partially offset by (i) $1.4 million in lower occupancy costs and $1.2 million in lower professional fees.

For the years ended December 31, 2023 and 2022, general and administrative expenses included $3.0 million and $3.9 million in transaction costs related to the Giphy and Pond5 acquisitions, respectively.

This was partially offset by a decrease in bad debt expense.

In addition, there was a $0.1 million decrease and a $2.6 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Bargain Purchase Gain .

We recognized a bargain purchase gain of $50.3 million in 2023 related to the acquisition of Giphy, which represents the excess of the fair value of the net assets acquired in addition to the net negative purchase price.

Impairment of Lease and Related Assets .

Impairment of lease and related assets was $18.7 million in 2022.

In the fourth quarter of 2022, the Company completed an analysis of leased-office usage and (i) ceased using certain of its office space, including two floors of its headquarters in New York City as well as (ii) abandoned certain other smaller office spaces.

This resulted in an $18.7 million impairment charge, of which $15.9 million and $2.8 million relates to right-of-use assets and property and equipment, respectively.

There was no impairment of lease and related assets in 2023.

Interest Expense .

In the twelve months ended December 31, 2024 and 2023, we recognized interest expense of $10.6 million and $1.9 million, respectively related to our credit facility and the amortization of deferred financing fees.

Other income / (expense), net.

During 2023, other income / (expense), net substantially consisted of $4.8 million of interest income and $0.9 million of favorable unrealized foreign currency fluctuations.

Interest expense for the twelve months ended December 31, 2024 increased due to borrowings under the A&R Credit Agreement entered into during the quarter ended September 30, 2024 to fund the acquisition of Envato.

Other income, net.

During the twelve months ended December 31, 2023, other income, net consisted of $4.8 million of interest income and $0.9 million of unrealized foreign currency gains.

During 2022, other income / (expense), net substantially consisted of $1.3 million of expense due to foreign currency fluctuations.

Income Taxes.

Income tax expense decreased by $2.7 million, to $12.2 million in 2023 as compared to 2022.

Income tax expense increased by $14.4 million, to $26.6 million in 2024 as compared to 2023.

Our effective tax rates for the years ended December 31, 2024 and 2023 were approximately 42.6% and 10.0%, respectively.

The 2024 effective tax rate differs from the U.S.

federal statutory tax rate primarily due to the non-taxable bargain purchase gain associated with the acquisition of Giphy, the effect of the U.S.

Research and Development (“R&D”) tax credit and the foreign-derived intangible income deduction.

The 2023 effective tax rate differs from the U.S.

federal statutory rate primarily due to the effect of the U.S.

R&D tax credit and the foreign-derived intangible income deduction.

federal statutory rate primarily due to non-taxable bargain purchase gain associated with the acquisition of Giphy, the effect of the U.S.

Research and Development (“R&D”) tax credit, and the foreign-derived intangible income deduction.

Liquidity and Capital Resources

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Historically, our principal uses of cash have included funding our operations, capital expenditures, and content acquisitions.

In addition, our capital allocation strategies also include funding business combinations and asset acquisitions that enhance our strategic position, cash dividend payments, principal and interest payments under our credit facilities and share

purchases under our share repurchase programs.

We plan to finance our operations, capital expenditures and corporate actions largely through cash generated by our operations and our credit facility.

We plan to finance our operations, capital expenditures and corporate actions

largely through cash generated by our operations and our credit facility.

Since our results of operations are sensitive to the level of competition we face, increased competition could adversely affect our liquidity and capital resources.

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As of December 31, 2025, we have repurchased approximately 5.5 million shares of our common stock since 2015 under our repurchase programs (including our 2015 and 2017 Share Repurchase Programs and our 2023 Share Repurchase Program) at an average per-share cost of $48.86.

During the year ended December 31, 2024, we repurchased approximately 1.1 million shares of our common stock at an average per share cost of $37.42.

During the year ended December 31, 2025, we did not repurchase shares of our common stock.

As of December 31, 2025, we had $30.2 million of remaining authorization for purchases under the 2023 Share Repurchase Program.

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Current Debt:

Revolver - Credit Facility — 30,000

Revolver - A&R Credit Agreement 155,000 155,000

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Net cash used in investing activities $ (47,797) $ (166,168) $ (54,316)

Net cash provided by / (used in) financing activities $ 150,096 $ (102,704) $ (79,487)

Net cash (used in) / provided by financing activities $ (59,098) $ 150,096 $ (102,704)

Operating Activities

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Net cash provided by operating activities was $166.7 million for the year ended December 31, 2025, compared to $32.6 million for the year ended December 31, 2024.

In the twelve months ended December 31, 2024, operating cash flows included a $10.3 million increase in the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows.

In addition, in the twelve months ended

December 31, 2024, operating cash flows included $63.3 million of cash outflows made for liabilities assumed which were triggered upon the closing of the Envato acquisition (‘the Envato Seller Obligations”).

The acquired cash from Envato included $63.4 million to fund the Envato Seller Obligations.

In the twelve months ended December 31, 2025, cash provided by operating activities was impacted by the timing of payments and cash receipts in the ordinary course of business which can cause operating cash flow to fluctuate from period to period.

Net cash provided by operating activities was $32.6 million for the year ended December 31, 2024, compared to $140.6 million for the year ended December 31, 2023.

The decline in cash provided by operating activities for the year ended December 31, 2023 was impacted by the timing of payments and cash receipts in the ordinary course of business which can cause operating cash flow to fluctuate from period to period.

In addition, operating cash flows for the year ended December 31, 2023 were unfavorably impacted by the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows.

In the twelve months ended December 31, 2024, operating cash flows included a

$10.3 million increase in the recurring and non-recurring payments made to the Giphy workforce, the reimbursement of which is reflected in Investing Activities on the Statement of Cash Flows.

In addition, in the twelve months ended December 31, 2024, operating cash flows included $63.3 million of cash outflows made for liabilities assumed which were triggered upon the closing of the Envato acquisition (“the Envato Seller Obligations”).

The acquired cash from Envato included $63.4 million to fund the Envato Seller Obligations.

Investing Activities

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Cash used in investing activities totaled $47.8 million, $166.2 million and $54.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Cash used in investing activities for the year ended December 31, 2025 was $47.8 million, consisting primarily of (i) capital expenditures of $42.9 million for internal-use software and website development costs and purchases of software and equipment;

and (ii) $6.5 million paid to acquire the rights to distribute certain digital content into perpetuity.

These cash outflows were partially offset by $1.6 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Cash used in investing activities for the year ended December 31, 2024 was $166.2 million, consisting primarily of (i) $179.1 million cash used in the acquisitions of Envato and Backgrid, net of cash acquired;

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These cash outflows were partially offset by $53.7 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Cash used in investing activities for the year ended December 31, 2022 was $275.6 million, consisting primarily of (i) $211.8 million cash used in the acquisitions of Pond5 and Splash News, net of cash acquired;

(ii) capital expenditures of $43.3 million for internal-use software and website development costs, and purchase of software and equipment, and (iii) $16.8 million to acquire the rights to distribute certain digital content in perpetuity.

Financing Activities

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Our financing activities also includes proceeds from and payments of our A&R Credit Agreement and our Credit Facility, and proceeds received in connection with the exercise of stock options.

Cash provided by financing activities totaled $150.1 million for the year ended December 31, 2024, and cash used in financing activities totaled $102.7 million and $79.5 million for the years ended December 31, 2023, and 2022, respectively.

Cash used in financing activities totaled $59.1 million and $102.7 million for the years ended December 31, 2025 and 2023, respectively, and cash provided by financing activities totaled $150.1 million and for the year ended December 31, 2024.

Cash used in financing activities during 2025 was $59.1 million, consisting of (i) $46.5 million, related to the payment of the quarterly cash dividend;

(ii) $9.4 million paid in the settlement of tax withholding obligations related to employee stock-based compensation awards;

and (ii) $3.1 million used for the repayment of our Credit Facility.

Cash provided by financing activities during 2024 was $150.1 million, consisting of (i) $280.0 million received from our A&R Credit Agreement;

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These amounts were partially offset by approximately $30.0 million in proceeds received from our Credit Facility.

Cash used in financing activities during 2022 primarily consisted of (i) $73.5 million in connection with the repurchase of common stock under our share repurchase program;

(ii) $34.6 million related to the payment of the quarterly cash dividend;

(iii) $22.6 million paid in settlement of tax withholding obligations related to employee stock-based compensation awards.

These amounts were partially offset by approximately $50.0 million in proceeds received from our Credit Facility.

Non-GAAP Financial Measures

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Our use of non-GAAP financial measures has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP, as the excluded items may have significant effects on our operating results and financial condition.

Additionally, our methods for measuring non-GAAP financial measures may differ from other companies’ similarly titled measures.

Additionally, our methods for measuring non-GAAP

financial measures may differ from other companies’ similarly titled measures.

When evaluating our performance, these non-GAAP financial measures should be considered alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.

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Adjusted Net Income and Adjusted Net Income Per Diluted Common Share

We define adjusted net income as net income adjusted for the impact of non-cash equity-based compensation, the amortization of acquisition-related intangible assets, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, impairment of lease and related assets, cost incurred associated with the Getty merger, unrealized gains and losses on investments, severance costs associated with strategic workforce optimizations and the estimated tax impact of such adjustments.

We define adjusted net income as net income adjusted for the impact of non-cash equity-based compensation, the amortization of acquisition-related intangible assets, impairment of lease assets, impairment loss on long-term investment, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, cost incurred associated with the Getty merger, unrealized gains and losses on investments, severance costs associated with strategic workforce optimizations, legal contingencies, and the estimated tax impact of such adjustments.

We define adjusted net income per diluted common share as adjusted net income divided by weighted average diluted shares.

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(338) (5,197) (7,421)

Impairment of lease and related assets — — 18,664

Tax effect of impairment of lease and related assets (1)

Merger-related costs 34,906 2,750 —

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(7,855) (619) —

(7,462) 7,425 12,493

Tax effect of other (1)

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The remainder of acquisition-related amortization expense is included in general and administrative expense in the Statement of Operations.

(4) Other consists of unrealized gains and losses on investments and severance costs associated with strategic workforce optimizations.

(4) Other consists of unrealized gains and losses on investments, severance costs associated with strategic workforce optimizations, impairment charges recorded for long-term investments and lease assets, and legal contingencies.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, impairment of lease and related assets, foreign currency transaction gains and losses, severance costs associated with strategic workforce optimizations, unrealized gains and losses on investments, transaction costs associated with the Getty merger, interest income and expense and income taxes.

We define adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, impairment of lease assets, bargain purchase gain related to the acquisition of Giphy, Giphy Retention Compensation Expense - non-recurring, foreign currency transaction gains and losses, severance costs associated with strategic workforce optimizations, impairment loss on long-term investment, unrealized gains and losses on investments, transaction costs associated with the Getty merger, legal contingencies, interest income and expense and income taxes.

We define adjusted EBITDA margin as the ratio of adjusted EBITDA to revenue.

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Unrealized gain on investment (20,909) (2,160) —

Impairment of lease and related assets — — 18,664

Workforce optimization - severance 9,585 12,493 1,576

13,447 9,585 12,493

Adjusted EBITDA $ 271,818 $ 247,115 $ 240,776

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Adjusted EBITDA margin 27.5 % 26.4 % 27.5 %

(1) Other consists of severance costs associated with strategic workforce optimizations, impairment charges recorded for long-term investments and lease assets, and legal contingencies.

Revenue Growth (including by distribution channel) on a Constant Currency Basis

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Adjusted Free Cash Flow

We define adjusted free cash flow as our net cash provided by operating activities, adjusted for capital expenditures, content acquisition, cash received related to Giphy Retention Compensation in connection with the acquisition of Giphy and cash paid for Envato Seller Obligations.

The following is a presentation of cash flow information and a reconciliation of net cash provided by operating activities to adjusted free cash flow for each of the periods indicated:

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Net cash used in investing activities $ (47,797) $ (166,168) $ (54,316)

Net cash provided by / (used in) financing activities $ 150,096 $ (102,704) $ (79,487)

Net cash (used in) / provided by financing activities $ (59,098) $ 150,096 $ (102,704)

Adjusted free cash flow:

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Cash paid for Envato Seller Obligations (1)

Merger related costs $ 30,588 $ — $ —

Adjusted Free Cash Flow $ 149,517 $ 108,693 $ 138,468

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We recognize revenue on both our subscription-based and transaction-based products when content is downloaded by a customer, at which time the license is provided.

In addition, for subscription-based products in which the Customer obtains an allotted number of digital assets to download, we estimate expected unused licenses and recognize the revenue associated with the unused licenses as digital assets are

downloaded and licenses are obtained for such content by the customer during the subscription period.

The estimate of unused licenses is based on historical download activity and future changes in the estimate could impact the timing of revenue recognition of our subscription products.

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Fair values are based on the exit price (i.e., the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date) and valuation methods that may be utilized include the multiple-period excess earnings method, the relief-from-royalty method and the cost-to-recreate method.

Determining the fair value requires management to use significant judgment and estimates, including revenue growth rates, the royalty rate, the discount rate, and the economic life related to developed technology and revenue growth rates, the royalty rate, and the the discount rate related to the trademark, among others.

Determining the fair value requires management to use significant judgment and estimates, including revenue growth rates, the royalty rate, the discount rate, and the economic life related to developed technology and revenue growth rates, the royalty rate, and the discount rate related to the trademark, among others.

Other assets and liabilities acquired in a business combination are recorded based on the fair value of the assets acquired and liabilities assumed at acquisition date.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis