Shutterstock, Inc.

Previous wording

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

Current wording

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 and the extension or refinancing of Getty Images’ existing debt obligations. 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:

Previous wording

•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;

Current wording

•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;

Previous wording

Our Content is distributed to customers under the following brands: Shutterstock; Pond5; TurboSquid; PicMonkey; PremiumBeat; Splash News; Bigstock; Envato; and Offset. Shutterstock, our flagship brand, includes various content types such as image, footage, music and editorial.

Current wording

Our Content is distributed to customers under the following brands: Shutterstock; Pond5; TurboSquid; PicMonkey; PremiumBeat; Splash News; Bigstock; and Envato. Shutterstock, our flagship brand, includes various content types such as image, footage, music and editorial.

Previous wording

Pond5 is a video-first content marketplace which expands the Company’s content offerings across footage, image and music. TurboSquid operates a marketplace that offers more than one million 3D models and a 2 dimensional (“2D”) marketplace derived from 3D objects. PicMonkey is a leading online graphic design and image editing platform. PremiumBeat offers exclusive high-quality music tracks and provides producers, filmmakers and marketers the ability to search handpicked production music from the world’s leading composers. Splash News provides editorial image and video content across celebrity and red carpet events. 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.

Current wording

Pond5 is a video-first content marketplace which expands the Company’s content offerings across footage, image and music. TurboSquid operates a marketplace that offers more than one million 3D models and a 2 dimensional (“2D”) marketplace derived from 3D objects. PicMonkey is a leading online graphic design and image editing platform. PremiumBeat offers exclusive high-quality music tracks and provides producers, filmmakers and marketers the ability to search handpicked production music from the world’s leading composers. Splash News provides editorial image and video content across celebrity and red carpet events. Bigstock maintains a separate content library tailored for creators seeking to incorporate cost-effective imagery into their projects. Envato enhances digital creative assets and templates.

Previous wording

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 Average Revenue per Customer from Giphy beginning July 2024 and Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato for the three months ended March 31, 2025, which was acquired in July 22, 2024.

Current wording

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 Average Revenue per Customer from Giphy beginning July 2024 and Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato for the three and six months ended June 30, 2025, which was acquired in July 22, 2024.

Previous wording

The following tables summarize our key operating metrics, which are unaudited, for the three months ended March 31, 2025 and 2024:

Current wording

The following tables summarize our key operating metrics, which are unaudited, for the three and six months ended June 30, 2025 and 2024:

Previous wording

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. Accordingly, the metrics include Average Revenue per Customer from Giphy beginning July 2024 and Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato for the three months ended March 31, 2025, which was acquired in July 22, 2024.

Current wording

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. Accordingly, the metrics include Average Revenue per Customer from Giphy beginning July 2024 and Subscribers, Subscriber revenue, and Average revenue per customer from Backgrid beginning February 2025. 2025 metrics include the counts and revenues from Envato for the three and six months ended June 30, 2025, which was acquired in July 22, 2024.

Previous wording

Content: The majority of our customers license image, video, music and 3D content for commercial purposes either directly through our self-service web properties or through our dedicated sales teams. Content customers have the flexibility to purchase subscription-based plans that are paid on a monthly or annual basis. Customers are also able to license content on a transactional basis. These customers generally license content under our standard or enhanced licenses, with additional licensing options available to meet customers’ individual needs. Certain content customers also have unique content, licensing and workflow needs. These customers communication with dedicated sales professionals, service and research teams which provide a number of tailored enhancements to their creative workflows including non-standard licensing rights, multi-seat access, ability to pay on credit terms, multi-brand licensing packages, increased indemnification protection and content licensed for use-cases outside of those available on the e-commerce platform.

Current wording

Content: The majority of our customers license image, video, music and 3D content for commercial purposes either directly through our self-service web properties or through our dedicated sales teams. Content customers have the flexibility to purchase subscription-based plans that are paid on a monthly or annual basis. Customers are also able to license content on a transactional basis. These customers generally license content under our standard or enhanced licenses, with additional licensing options available to meet customers’ individual needs. Certain content customers also have unique content, licensing and workflow needs. These customers communicate with dedicated sales professionals, service and research teams which provide a number of tailored enhancements to their creative workflows including non-standard licensing rights, multi-seat access, ability to pay on credit terms, multi-brand licensing packages, increased indemnification protection and content licensed for use-cases outside of those available on the e-commerce platform.

Previous wording

Data, Distribution, and Services: Our Data, Distribution, and Services offering addresses customer demand for products and services that are beyond our stock image, footage music and 3D model licenses. We have seen increased demand for access to our metadata for machine learning and generative artificial intelligence model training. We offer ethically sourced and licensable metadata at unique scales and quality. Our metadata customer base ranges from large technology and media companies to smaller start-up organizations.

Current wording

Data, Distribution, and Services: Our Data, Distribution, and Services offering addresses customer demand for products and services that are beyond our stock image, footage music and 3D model licenses. We have seen increased demand for access to our metadata for machine learning and generative artificial intelligence model training. We offer ethically sourced and licenseable metadata at unique scales and quality. Our metadata customer base ranges from large technology and media companies to smaller start-up organizations.

Previous wording

The Company’s revenues by distribution channel for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

Current wording

The Company’s revenues by distribution channel for the three and six months ended June 30, 2025 and 2024 are as follows (in thousands):

Previous wording

Product Development. Product development expenses consist of employee compensation, including non-cash equity-based compensation, bonuses and benefits, and expenses related to vendors engaged in product management, design, development and testing of our websites and products. Product development costs also includes software and other IT equipment costs, allocated facility expenses and other supporting overhead costs.

Current wording

Product Development. Product development expenses consist of employee compensation, including non-cash equity-based compensation, bonuses and benefits, and expenses related to vendors engaged in product management, design, development and testing of our websites and products. Product development costs also include software and other IT equipment costs, allocated facility expenses and other supporting overhead costs.

Previous wording

Revenue increased by $28.3 million, or 13%, to $242.6 million for the three months ended March 31, 2025, compared to the same period in 2024. On a constant currency basis, revenue increased 14% in the three months ended March 31, 2025, compared to the same period in 2024 The increase was largely attributable to revenue recognized from Envato, which we did not have in the same period in 2024.

Current wording

Revenue increased by $46.9 million, or 21%, to $267.0 million for the three months ended June 30, 2025, compared to the same period in 2024. On a constant currency basis, revenue increased 20% in the three months ended June 30, 2025, compared to the same period in 2024. The increase was largely attributable to revenue recognized from Envato, which we did not have in the same period in 2024, and growth in our data offering during the period.

Previous wording

The Company’s Content revenues increased by 17%, to $202.9 million in the three months ended March 31, 2025, compared to the same period in 2024. Content revenue was not impacted by foreign currency fluctuations in the three months ended March 31, 2025, compared to the same period in 2024. During the three months ended March 31, 2025, growth in our Content revenue was driven by the contribution of Envato, which was acquired on July 22, 2024. The increase was partially offset by a reduction in Content revenue generated from Shutterstock’s content offering due to weakness in new customer acquisition.

Current wording

Our Content revenues increased by 18%, to $199.8 million in the three months ended June 30, 2025, compared to the same period in 2024. On a constant currency basis, content revenue increased 16% in the three months ended June 30, 2025, compared to the same period in 2024. During the three months ended June 30, 2025, growth in our Content revenue was driven by the contribution of Envato, which was acquired on July 22, 2024.

Previous wording

Changes in our revenue by region were as follows: revenue from North America increased by $9.8 million, or 9%, to $120.2 million, revenue from Europe increased by $10.8 million, or 19%, to $66.2 million and revenue from outside Europe and North America increased by $7.7 million, or 16%, to $56.2 million, in the three months ended March 31, 2025 compared to the same period in 2024.

Current wording

Changes in our revenue by region were as follows: revenue from North America increased by $27.8 million, or 23%, to $147.9 million, revenue from Europe increased by $11.0 million, or 21%, to $64.4 million and revenue from outside Europe and North America increased by $8.2 million, or 18%, to $54.7 million, in the three months ended June 30, 2025 compared to the same period in 2024.

Previous wording

Cost of Revenue. Cost of revenue increased by $12.7 million to $100.9 million in the three months ended March 31, 2025 compared to the same period in 2024. As a percentage of revenue, cost of revenue increased to 42% for the three months ended March 31, 2025, from 41% for the same period in 2024. This increase was driven by increased royalties, content expenses, employee-related costs, and website hosting fees, primarily driven by the acquisition of Envato. These amounts were partially offset by a decrease in recurring and non-recurring Giphy Retention Compensation. We expect that our cost of revenue will continue to fluctuate in-line with changes in revenue.

Current wording

Cost of Revenue. Cost of revenue increased by $14.7 million to $106.0 million in the three months ended June 30, 2025 compared to the same period in 2024. This increase was driven by increased royalties, content expenses, employee-related costs, and website hosting fees, primarily driven by the acquisition of Envato. These amounts were partially offset by a decrease in recurring and non-recurring Giphy Retention Compensation. As a percentage of revenue, cost of revenue decreased to 40% for the three months ended June 30, 2025, from 41% for the same period in 2024. We expect that our cost of revenue will continue to fluctuate in-line with changes in revenue.

Previous wording

Sales and Marketing. Sales and marketing expenses decreased by $2.9 million, or 5%, to $53.4 million in the three months ended March 31, 2025 compared to the same period in 2024. As a percentage of revenue, sales and marketing expenses decreased to 22% for the three months ended March 31, 2025, from 26% for the same period in 2024. This was driven by a decrease in brand and performance-based marketing expenses and a decrease in consultant expenses. In addition, there was a

Current wording

Sales and Marketing. Sales and marketing expenses increased by $5.2 million, or 10%, to $57.1 million in the three months ended June 30, 2025 compared to the same period in 2024. This was driven by an increase in brand and performance-based marketing expenses. In addition, there was a $0.7 million increase from recurring Giphy Retention Compensation expenses and an increase in employee-related costs driven by the acquisition of Envato. As a percentage of revenue, sales and marketing expenses decreased to 21% for the three months ended June 30, 2025, from 24% for the same period in 2024. 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.

Previous wording

General and Administrative. General and administrative expenses increased by $26.2 million to $58.3 million in the three months ended March 31, 2025 compared to the same period in 2024. This increase was driven by $11.9 million associated with the Getty merger and increases in professional fees, employee-related costs, bad debt expenses, and other general and administrative expenses attributed to the addition of Envato. In addition, there was a $0.4 million increase and a $1.6 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Current wording

General and Administrative. General and administrative expenses increased by $12.0 million to $48.4 million in the three months ended June 30, 2025 compared to the same period in 2024. This increase was driven by $8.7 million of expenses associated with the Getty merger, and increases in employee-related costs and other general and administrative expenses attributed to the addition of Envato. This was partially offset by a decrease in professional fees. In addition, there was a $0.1 million increase and a $0.6 million decrease from recurring and non-recurring Giphy Retention Compensation expenses, respectively.

Previous wording

Interest Expense. In the three months ended March 31, 2025 and March 31, 2024, we recognized interest expense of $4.3 million and $0.6 million, respectively, related to our credit facility and the amortization of deferred financing fees. Interest expense for the three months ended March 31, 2025 increased due to the borrowings under A&R Credit Agreement entered into during the quarter ended September 30, 2024 to fund the acquisition of Envato.

Current wording

Interest Expense. In the three months ended June 30, 2025 and June 30, 2024, we recognized interest expense of $4.2 million and $0.6 million, respectively, related to our credit facility and the amortization of deferred financing fees. Interest expense for the three months ended June 30, 2025 increased due to the borrowings under A&R Credit Agreement entered into during the quarter ended September 30, 2024 to fund the acquisition of Envato.

Previous wording

Other Income, Net. In the three months ended March 31, 2025, other income, net was driven by $13.3 million of unrealized gains related to our investment in Meitu, Inc. In addition, other income, net had $0.9 million of interest income and $0.3 million of unrealized foreign currency gains. In the three months ended March 31, 2024, other income, net was primarily driven by $3.8 million of unrealized gains related to our investment in Meitu, Inc. In addition, other income, net had $4.8 million of interest income and $0.6 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.

Current wording

Other Income / (Expense), Net. In the three months ended June 30, 2025, other income / (expense), net was driven by $18.0 million of unrealized gains related to our investment in Meitu, Inc. In addition, other income / (expense), net had $1.1 million of interest income. This was partially offset by a $5.0 million expense related to the impairment of our long-term investment in an equity security, and $1.5 million of unrealized foreign currency losses. In the three months ended June 30, 2024, other income / (expense), net was primarily driven by $3.6 million of unrealized losses related to our investment in Meitu, Inc. In addition, other income / (expense), net had $1.3 million of interest income and $1.3 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.

Previous wording

Income Taxes. The income tax benefit decreased by $2.5 million for the three months ended March 31, 2025, compared to the same period in 2024. Our effective tax rates were 8.5% and 20.9% for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Income Taxes. The income tax benefit increased by $0.8 million for the three months ended June 30, 2025, compared to the same period in 2024. Our effective tax rates were 31.7% and 78.1% for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

For the three months ended March 31, 2025, the net effect of discrete items decreased the effective tax rate by 19.6%. The discrete items for the three months ended March 31, 2025 primarily relate to decreases for the UK valuation allowance and tax reserve releases. Excluding discrete items, our effective tax rate would have been 28.1% for the three months ended March 31, 2025.

Current wording

For the three months ended June 30, 2025, the net effect of discrete items increased the effective tax rate by 2.3%. The discrete items for the three months ended June 30, 2025 primarily relate to shortfalls on equity award vestings, partially offset by a decrease in valuation allowance. Excluding discrete items, our effective tax rate would have been 29.4% for the three months ended June 30, 2025.

Previous wording

Product Development. Product development expenses decreased by $1.2 million to $19.9 million in the three months ended March 31, 2025 compared to the same period in 2024. The decrease in product development was driven by decreases of $1.5 million and $4.0 million from recurring and non-recurring Giphy Retention Compensation expenses, respectively. These costs were partially offset by increases in employee-related costs and software licenses driven by the acquisition of Envato. 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.

Current wording

Product Development. Product development expenses decreased by $0.3 million, or 1%, to $40.6 million in the six months ended June 30, 2025 as compared to the same period in 2024. The decrease in product development was driven by decreases of $1.8 million and $7.1 million from recurring and non-recurring Giphy Retention Compensation expenses, respectively. This was partially offset by increases in software licenses and employee-related costs driven by the acquisition of Envato. 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.

Previous wording

As of March 31, 2025, we had cash and cash equivalents totaling $112.2 million which consisted primarily of bank balances. Since inception, we have financed our operations primarily through cash flows generated from operations. In addition, if necessary, we have the ability to draw on our A&R Credit Agreement dated July 22, 2024.

Current wording

As of June 30, 2025, we had cash and cash equivalents totaling $116.4 million which consisted primarily of bank balances. Since inception, we have financed our operations primarily through cash flows generated from operations. In addition, if necessary, we have the ability to draw on our A&R Credit Agreement dated July 22, 2024.

Previous wording

We declared and paid cash dividends of $0.33 per share of common stock, or $11.5 million during the three months ended March 31, 2025.

Current wording

We declared and paid cash dividends of $0.66 per share of common stock, or $23.1 million during the six months ended June 30, 2025.

Previous wording

As of March 31, 2025, we have repurchased approximately 5.5 million shares of our common stock under the Share Repurchase Program at an average per-share cost of $48.86. During the three months ended March 31, 2025 and 2024, we did not repurchase shares of our common stock. As of March 31, 2025, we had $30 million of remaining authorization for repurchases under the Share Repurchase Program.

Current wording

As of June 30, 2025, we have repurchased approximately 5.5 million shares of our common stock under the Share Repurchase Program at an average per-share cost of $48.86. During the three and six months ended June 30, 2025, we did not repurchase shares of our common stock. During the three and six months ended June 30, 2024, we repurchased approximately 517,000 shares of our common stock at an average cost of $39.83. As of June 30, 2025, we had $30 million of remaining authorization for repurchases under the Share Repurchase Program.

Previous wording

For the three months ended March 31, 2025, we recognized interest expense of $4.3 million. As of March 31, 2025, unamortized debt issuance cost related to the Term Loan - A&R Credit Agreement is $0.7 million.

Current wording

For the three and six months ended June 30, 2025, we recognized interest expense of $4.2 million and $8.5 million, respectively. As of June 30, 2025, unamortized debt issuance cost related to the Term Loan - A&R Credit Agreement is $0.6 million.

Previous wording

As of March 31, 2025, we had approximately $40 million in unconditional cash obligations, consisting primarily of purchase obligations related to contracts for cloud-based services, infrastructure and other business services as well as minimum royalty guarantees in connection with certain content licenses, of which the majority is due to be paid within the next two years. In addition, as of March 31, 2025, we had approximately $34 million in operating lease obligations with lease payments extending through 2029.

Current wording

As of June 30, 2025, we had approximately $29 million in unconditional cash obligations, consisting primarily of purchase obligations related to contracts for cloud-based services, infrastructure and other business services as well as minimum royalty guarantees in connection with certain content licenses, of which the majority is due to be paid within the next two years. In addition, as of June 30, 2025, we had approximately $33 million in operating lease obligations with lease payments extending through 2029.

Previous wording

The following table summarizes our cash flow data for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our cash flow data for the six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Net cash provided by operating activities was $25.2 million for the three months ended March 31, 2025, compared to Net cash provided by operating activities of $8.3 million for the three months ended March 31, 2024. In the three months ended March 31, 2025, operating cash flows were unfavorably impacted from payments of year-end bonuses and commissions, which are typical first quarter cash outflows. In addition, operating cash flows included a $17.9 million decrease 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.

Current wording

Net cash provided by operating activities was $52.1 million for the six months ended June 30, 2025, compared to Net cash provided by operating activities of $36.3 million for the six months ended June 30, 2024. In the six months ended June 30, 2025, operating cash flows included a $35.7 million decrease 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.

Previous wording

Operating cash flows for the three months ended March 31, 2024 were unfavorably impacted from payments of year-end bonuses and commissions, which are typical first quarter cash outflows. In addition, operating cash flows for the three months ended March 31, 2024 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.

Current wording

Operating cash flows for the six months ended June 30, 2024 included 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.

Previous wording

Cash used in investing activities for the three months ended March 31, 2025 was $11.2 million, consisting primarily of (i) capital expenditures of $10.8 million for internal-use software and website development costs and purchases of software and equipment; and (ii) $0.9 million paid to acquire the rights to distribute certain digital content into perpetuity. These cash outflows were partially offset by $0.5 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Current wording

Cash used in investing activities for the six months ended June 30, 2025 was $26.2 million, consisting primarily of (i) capital expenditures of $22.1 million for internal-use software and website development costs and purchases of software and equipment; and (ii) $5.0 million paid to acquire the rights to distribute certain digital content into perpetuity. These cash outflows were partially offset by $0.9 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Previous wording

Cash used in investing activities in the three months ended March 31, 2024 was $16.5 million, consisting primarily of (i) $19.5 million used in the acquisition of Backgrid, net of cash acquired, (ii) capital expenditures of $14.5 million for internal-use software and website development costs and purchases of software and equipment, and (iii) $1.0 million paid to acquire the rights to distribute certain digital content in perpetuity. These cash outflows were partially offset by (i) $18.4 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Current wording

Cash used in investing activities in the six months ended June 30, 2024 was $8.2 million, consisting primarily of (i) capital expenditures of $23.5 million for internal-use software and website development costs and purchases of software and equipment, (ii) $19.5 million used in the acquisition of Backgrid, net of cash acquired, and (iii) $1.8 million paid to acquire the rights to distribute certain digital content in perpetuity. These cash outflows were partially offset by (i) $36.5 million of Giphy Retention Compensation, as reimbursed by the Giphy seller.

Previous wording

Cash used in financing activities for the three months ended March 31, 2025 was $15.8 million, consisting of (i) $11.5 million, related to the payment of the quarterly cash dividend; (ii) $3.5 million paid in the settlement of tax withholding obligations related to employee stock-based compensation awards; and (ii) $0.8 million used for the repayment of our Credit Facility.

Current wording

Cash used in financing activities for the six months ended June 30, 2025 was $29.7 million, consisting of (i) $23.1 million, related to the payment of the quarterly cash dividend; (ii) $5.0 million paid in the settlement of tax withholding obligations related to employee stock-based compensation awards; and (ii) $1.6 million used for the repayment of our Credit Facility.

Previous wording

Cash used in financing activities in the three months ended March 31, 2024 was $18.6 million, consisting of (i) $10.7 million related to the payment of the quarterly cash dividend; and (ii) $8.0 million paid in settlement of tax withholding obligations related to employee stock-based compensation awards.

Current wording

Cash used in financing activities in the six months ended June 30, 2024 was $50.8 million, consisting of (i) $21.3 million related to the payment of the quarterly cash dividend; (ii) $20.6 million paid in connection with the repurchase of common stock under our 2023 Share Repurchase Program; and (iii) $8.9 million paid in settlement of tax withholding obligations related to employee stock-based compensation awards.

Previous wording

The expense associated with the Giphy Retention Compensation related to (i) the one-time employment inducement bonuses and (ii) the vesting of the cash value of unvested Meta equity awards held by the employees prior to closing, which are reflected in operating expenses (together, the “Giphy Retention Compensation Expense - non-recurring”), are required payments in accordance with the terms of the acquisition. Meta’s sale of Giphy was directed by the CMA and accordingly, the terms of the acquisition were subject to CMA preapproval. Management considers the operating expense associated with these required payments to be unusual and non-recurring in nature. The Giphy Retention Compensation Expense - non-recurring is not considered ongoing expense necessary to operate the Company’s business. Therefore, such expenses have been included in the below adjustments for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted common share. For the three months ended March 31, 2025, the Company also incurred $4.8 million, of Giphy Retention Compensation expense related to recurring employee costs, which is included in operating expenses, and are not included in the below adjustments for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted common share.

Current wording

The expense associated with the Giphy Retention Compensation related to (i) the one-time employment inducement bonuses and (ii) the vesting of the cash value of unvested Meta equity awards held by the employees prior to closing, which are reflected in operating expenses (together, the “Giphy Retention Compensation Expense - non-recurring”), are required payments in accordance with the terms of the acquisition. Meta’s sale of Giphy was directed by the CMA and accordingly, the terms of the acquisition were subject to CMA preapproval. Management considers the operating expense associated with these required payments to be unusual and non-recurring in nature. The Giphy Retention Compensation Expense - non-recurring is not considered ongoing expense necessary to operate the Company’s business. Therefore, such expenses have been included in the below adjustments for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted common share. For the three months ended June 30, 2025, the Company also incurred $4.3 million, of Giphy Retention Compensation expense related to recurring employee costs, which is included in operating expenses, and are not included in the below adjustments for calculating adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted common share.

Previous wording

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, Giphy Retention Compensation Expense - non-recurring, unrealized gains and losses on investments, severance costs associated with strategic workforce optimizations, costs incurred associated with the Getty merger, 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.

Current wording

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 loss on long-term investment, Giphy Retention Compensation Expense - non-recurring, unrealized gains and losses on investments, severance costs associated with strategic workforce optimizations, costs incurred associated with the Getty merger, 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.

Previous wording

(2)Of these amounts, $9.0 million and $8.2 million are included in cost of revenue for the three months ended March 31, 2025 and 2024, respectively. The remainder of acquisition-related amortization expense is included in general and administrative expense in the Statement of Operations.

Current wording

(3)Of these amounts, $8.9 million and $8.2 million are included in cost of revenue for the three months ended June 30, 2025 and 2024, respectively. The remainder of acquisition-related amortization expense is included in general and administrative expense in the Statement of Operations.

Previous wording

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

Current wording

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

Previous wording

We define adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, Giphy Retention Compensation Expense - non-recurring, costs incurred associated with the Getty merger, foreign currency transaction gains and losses, severance costs associated with strategic workforce optimizations, unrealized gains and losses on investments, interest income and expense and income taxes. We define adjusted EBITDA margin as the ratio of adjusted EBITDA to revenue.

Current wording

We define adjusted EBITDA as net income adjusted for depreciation and amortization, non-cash equity-based compensation, Giphy Retention Compensation Expense - non-recurring, costs incurred associated with the Getty merger, 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, interest income and expense and income taxes. We define adjusted EBITDA margin as the ratio of adjusted EBITDA to revenue.