Getty Images Holdings, Inc.

Note 1 - Description of the Company and Basis of Presentation

Description of the Company

Getty Images Holdings, Inc. (the “Company” or “Getty Images”) is a preeminent global visual content creator and marketplace that offers a full range of content solutions to meet the needs of customers around the globe, no matter their size. Through Getty Images, iStock, and Unsplash brands, websites, and APIs, the Company serves customers in almost every country in the world and is one of the first places people turn to discover, purchase, and share powerful visual content from the world’s best photographers and videographers. The Company brings content to media outlets, advertising agencies, and corporations and also serves individual creators and prosumers.

Merger Agreement with Shutterstock

On January 6, 2025, Getty Images entered into an Agreement and Plan of Merger (the “Merger Agreement”) to combine in a merger-of-equals transaction with Shutterstock, Inc. (“Shutterstock”) (such transaction referred to herein as the “Merger”). Subject to terms and conditions in the Merger Agreement, the aggregate consideration to be paid by Getty Images in respect of the outstanding shares of common stock of Shutterstock will be:

•An amount in cash equal to the product of $9.50 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) (the “Total Cash Amount”); and

•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) (the “Total Stock Amount”).

Each of the Total Cash Amount and the Total Stock Amount will be fixed as of immediately prior to closing of the Merger. Therefore, cash elections will be subject to proration if cash elections are oversubscribed and stock elections will be subject to proration if stock elections are oversubscribed. 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:

•Cash consideration of $9.50 and 9.17 shares of Getty Images common stock;

•Cash consideration of $28.8487; or

•13.67237 shares of Getty Images common stock.

The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, and other customary closing conditions.

The Company expensed $3.2 million of legal, accounting, and other direct costs related to this proposed Merger during the three months ended March 31, 2026 and $18.0 million in the three months ended March 31, 2025. These costs are included in “Other operating expenses - net” in the Condensed Consolidated Statements of Operations.

On February 23, 2026, Getty Images and Shutterstock announced that they had received notice that the DOJ had concluded its review of the proposed merger and the applicable waiting period under the Hart-Scott-Rodino Act had expired, without conditions.

On October 20, 2025, the Company received notice that the CMA intended to refer the proposed Merger to a Phase 2 review process unless acceptable undertakings to address their competition concerns were offered. On November 3, 2025, the Company received notice that the CMA had referred the Merger to a Phase 2 review process. On February 19, 2026, the CMA issued a provisional decision with respect to the proposed merger (“Interim Report”) and directed that any proposed remedies be submitted to the CMA by March 5, 2026. On March 11, 2026, the CMA published an Invitation to

Comment on Remedies, with responses due by March 18, 2026 and published a Notice of Extension, extending its reference period by eight weeks to June 14, 2026. On March 12, 2026, Getty Images and Shutterstock responded to the Interim Report. On April 16, 2026, the CMA issued a provisional decision with respect to the appropriate remedy to address the competition concerns provisionally identified in the Interim Report. The Company remains committed to the proposed Merger and will continue to engage with CMA and work with Shutterstock to expeditiously secure the necessary clearances.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Getty Images have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 16, 2026 (the “2025 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for any future period or the entire year.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Estimates and Assumptions

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 2 - Summary of Significant Accounting Policies

Cash, Cash Equivalents and Restricted Cash

The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2026 and December 31, 2025 (in thousands):

In connection with the issuance of the 10.500% Senior Secured Notes, the Company deposited the gross proceeds into an escrow account. These amounts are restricted and may be released only upon satisfaction of specified conditions, including the consummation of the proposed Merger with Shutterstock. If the Merger is not consummated, the funds will be released or otherwise applied in accordance with the terms of the related agreements.

The Company also maintains smaller amounts of restricted cash as collateral for certain corporate obligations.

There have been no changes to the significant accounting policies described in the 2025 Form 10-K that have had a material impact on the Company’s condensed consolidated financial statements and related notes.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures upon adoption.

Note 3 - Revenue

Revenue is derived from licensing rights to use images, video footage, music delivered digitally online and data. Digital content licenses are generally purchased on a monthly or annual subscription basis, whereby a customer either pays for a predetermined quantity of content or for access to the Company’s content library 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. Also, a significant portion of revenue is generated through the sale and subsequent use of credits. Various amounts of credits are required to license digital content. The Company also generates revenue by providing customers with access to its data and content for machine learning and generative artificial intelligence model training uses.

The Company recognizes revenue under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. To achieve that core principle, the Company applies the following five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when a performance obligation is satisfied.

For digital content licenses, the Company recognizes revenue on its capped subscription-based, credit-based sales, single image and data access and/or licenses when content is downloaded, at which time the license is provided. In addition, management estimates expected unused licenses for capped subscription-based and credit-based products and recognizes the revenue associated with the unused licenses throughout the subscription or credit 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 the Company’s subscription products.

For uncapped digital content subscriptions, the Company has determined that access to the existing content library and future digital content updates represent two separate performance obligations. As such, a portion of the total contract consideration related to access to the existing content library is recognized as revenue at the commencement of the contract when control of the content library is transferred. The remaining contractual consideration is recognized as revenue ratably over the term of the contract when updated digital content is transferred to the licensee, in line with when the control of the new content is transferred.

Revenue associated with hosted software services is recognized ratably over the term of the license.

Disaggregation of Revenue

The following provides information about disaggregated revenue by major product line, primary geographic market, and timing of revenue recognition.

Revenue by major product:

Revenue by region:

The March 31, 2026 deferred revenue balance will be earned as content is downloaded, services are provided, or upon the expiration of subscription-based products, and nearly all is expected to be earned within the next twelve months.

During the three months ended March 31, 2026, the Company recognized revenue of $81.4 million that had been included in deferred revenue as of January 1, 2026.

Note 4 - Fair Value of Financial Instruments

The Company’s financial instruments consist of cash equivalents and debt. Assets and liabilities measured at fair value on a recurring basis (cash equivalents) and a nonrecurring basis (debts) are categorized in the tables below.

The fair value of the Company’s money market funds is based on quoted active market prices and is determined using the market approach. The fair value of the Company’s debt is based on market quotes provided by a third-party pricing source.

The following tables summarize the Company’s financial instruments by level in the fair value hierarchy as of March 31, 2026:

The following tables summarize the Company’s financial instruments by level in the fair value hierarchy as of December 31, 2025:

The Company’s non-financial assets and liabilities, which include goodwill and long-lived assets held and used, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur or if an annual impairment test is required, the Company would evaluate the non-financial assets and liabilities for impairment. If an impairment was to occur, the asset or liability would be recorded at its estimated fair value.

Note 5 - Other Assets and Liabilities

The following table summarizes the Company’s other long-term assets:

The following table summarizes the Company’s accrued expenses:

Note 6 - Debt

Debt included the following:

1 The table above converted the 2025 EUR Term Loans to USD using currency exchange rates as of those dates.

The Company’s debt consists of various Term Loans, Senior Secured Notes, and Senior Unsecured Notes. During 2025, the Company refinanced its outstanding Term Loans by incurring new 2025 Term Loans, which were used to repay the 2019 Term Loans and extend maturities. The Company also completed a permitted exchange of a portion of the 2025 USD Term Loans for 11.250% Senior Secured Notes due 2030, issued 2025 Senior Unsecured Notes, and, in connection with financing for the proposed merger with Shutterstock, issued 10.500% Senior Secured Notes. In relation to these prior year refinancing activities, the Company expensed $3.2 million during the three months ended March 31, 2025 in third-party costs that did not qualify as debt issuance costs as “Other non-operating income (expense) – net” and $5.5 million of “Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations. No comparable costs or losses were recorded during the three months ended March 31, 2026.

The Company maintains a $150.0 million revolving credit facility maturing on May 4, 2028. The facility was undrawn as of March 31, 2026. Subsequent to March 31, 2026, United States Court of Appeals for the Second Circuit denied the Company’s petition for rehearing in connection with the Initial Warrant Litigation (as defined in “Note 11 - Legal Proceedings and Contingencies”). On April 22, 2026, the Company drew $120.0 million from this facility, with proceeds used in part to pay the Initial Warrant Litigation judgment and associated interest. See “Note 11 - Legal Proceedings and Contingencies.”

The Company was in compliance with all covenants as of March 31, 2026.

Note 7 - Equity-based Compensation

Equity Incentive Plans

Under the Getty Images Holdings, Inc. 2022 Equity Incentive Plan (“2022 Plan”), the Company grants restricted stock units, performance stock units and stock options. The Company granted 16,901,011 awards under the 2022 Plan during the three months ended March 31, 2026. Under the 2022 Plan, up to 51,104,577 shares of Class Acommon stock are reserved for issuance, of which 4,551,841 were available to be issued as of March 31, 2026.

Included in awards granted during thethree months ended March 31, 2026 are 11.4 million restricted stock units granted on March 31, 2026 (the “March 2026 RSU Grant”). As of March 31, 2026, total unrecognized compensation cost related to the March 2026 RSU Grant was approximately $9.0 million, which is expected to be recognized over a weighted-average period of 2.6 years.

The Company maintains the Getty Images Holdings, Inc. Earn Out Plan; however, there were no awards granted or outstanding under the plan during the periods presented.

Stock Option Exchange

In March 2026, the Company completed a voluntary stock option exchange under which 19.3 million options were cancelled and 4.2 million replacement options were granted. The exchange was structured as a value-for-value exchange, and the replacement awards retained the vesting terms of the surrendered options.

The exchange did not result in incremental stock-based compensation expense and the Company continues to recognize the remaining unamortized compensation cost over the remaining requisite service periods.

Equity-based compensation expense is recorded in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations, net of estimated forfeitures. The Company recognized equity-based compensation - net of estimated forfeitures of $3.5 million and $5.0 million for the three months ended March 31, 2026 and March 31, 2025, respectively. The Company capitalized $0.1 million and $0.5 million of equity-based compensation expense incurred in connection with the development internal-use software during the three months ended March 31, 2026 and March 31, 2025, respectively.

Note 8 - Net Loss per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

In periods where the Company recognizes a net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive.

In periods where the Company recognizes net income, diluted net income per share is computed by dividing the net income attributable to common stockholders by the weighted average common shares outstanding and all potential common shares, if they are dilutive. The potentially dilutive effect of options is computed using the treasury stock method. Securities that potentially have an anti-dilutive effect are excluded from the diluted earnings per share calculation.

The following table sets forth the computation of basic and diluted loss per share of Class A common stock (amounts in thousands, except share and per share amounts):

As the Company had a net loss for the three months ended March 31, 2026 the diluted net loss per share does not include 30.2 million shares of Class A common stock in equity-based compensation awards as their effect would have been anti-dilutive.

Note 9 - Income Taxes

The provision for income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate as prescribed under ASC 740 “Income Taxes” (“ASC 740”). Any changes to the estimated annual effective tax rate are recorded in the interim period in which the changes occur.

The estimated annual effective tax rate is subject to significant volatility due to several factors, including changes in the forecasted pre-tax income (loss) and income tax (expense) benefit, realizability of deferred tax assets, intercompany transactions, foreign currency gain (loss), mergers and acquisitions, jurisdictional footprints, and changes in the Company’s business operations. In addition, the effective tax rate’s volatility depends on the amount of pre-tax income (loss). For example, the impact of non-taxable, non-deductible, and discrete items on the effective tax rate is greater when the pre-tax income (loss) is smaller.

The Company recorded an income tax expense of $2.6 million and $64.6 million for three months ended March 31, 2026 and 2025, respectively. For 2026, the Company’s effective tax rate is expected to be a large negative percentage due to the Company’s pre-tax loss and income tax expense items that are not analogous to pre-tax loss, such as foreign withholding taxes, non-deductible interest expense, and change in valuation allowance. The effective tax rate may vary significantly throughout the year depending on the changes in the pre-tax income (loss).

Note 10- Segment Information

Certain financial information for the Company’s segment, including significant expenses and other segment expense items are listed below:

1 The significant segment expense items are expense information that is regularly provided to the CODM.

2 Total Selling, general and administrative expenses, excluding Marketing costs and Equity compensation expenses.

3 Includes Depreciation, Amortization, Other operating expense (income) - net, Loss on litigation, Recovery of loss on litigation, and Equity compensation expenses.

4 Other segment non-operating income (expense) includes Foreign exchange gain (loss) – net, Loss on extinguishment of debt, and Other non-operating income (expense) – net

The Company does not have intra-entity sales or transfers. Asset information on asegment basis is not different than that presented in the Condensed Consolidated Balance Sheets.

Note 11 - Legal Proceedings and Contingencies

Warrant Litigation

The Company previously issued 20,700,000 public warrants, which were governed by Warrant Agreements, dated August 4, 2020 (the “Warrant Agreement”) and redeemed by the Company in October 2022. On October 27, 2023, the United States District Court for the Southern District of New York (the “Court”) issued a decision in the actions brought by Alta Partners, LLC (“Alta”) and the CRCM Institutional Master Fund (BVI), LTD (“CRCM” and together with Alta, the “Plaintiffs”) captioned: Alta Partners, LLC v. Getty Images Holdings, Inc., Case No. 1:22-cv-08916 (filed October 19, 2022), and CRCM Institutional Master Fund (BVI) LTD, et al. v. Getty Images Holdings, Inc., Case No. 1:23-cv-01074 (filed February 8, 2023) (together, the “Initial Warrant Litigation”) on cross-motions for summary judgment and entered judgment in favor of Plaintiffs on their breach of contract claims and, in accordance with Plaintiffs’ calculations, awarded damages in the amount of $36.9 million for Alta with respect to 2,066,371 public warrants that it owned as of the purported exercise date and $51.0 million for CRCM with respect to 3,010,764 public warrants that they owned as of the purported exercise date, plus, in each case, pre-judgment interest of 9% per annum. The Court entered judgment in favor of the Company on all other claims asserted by Plaintiffs including a similar breach of contract claim by Alta with respect to 11,593,149 public warrants that Alta had purchased in the open market after the date on which it had purported to exercise warrants and before the warrants were redeemed by the Company, and for which Alta sought the same per warrant money damages. The Company appealed the portion of the Court’s judgment in favor of Plaintiffs and Alta cross-appealed the portion of the Court’s judgment in favor of the Company with respect to the later-acquired public warrants.

In an Opinion issued on January 15, 2026, the United States Court of Appeals for the Second Circuit affirmed the Court’s opinion as to the Company's liability and the monetary judgment in all respects, with one judge dissenting. The Company filed a petition for rehearing of the decision by the Second Circuit on February 19, 2026. In an Order issued on April 16, 2026, the Second Circuit denied the Company’s petition for rehearing. The Company issued payment for the judgment and related interest to the Plaintiffs on April 23, 2026. See “Note 12 - Subsequent Events”.

The Company has been named as a defendant infourteen additional lawsuits by purported former public warrant holders alleging to have owned approximately 4.3 million public warrants in the aggregate (collectively, the “Follow-On Warrant Litigation”). Two of these additional suits were filed in the United States District Court for the Southern District of New York, Daniel Berner v. Getty Images Holdings, Inc., Case No. 1:24-cv-04483-JSR (filed June 11, 2024), and James Lapp v. Getty Images Holdings, Inc., Case No. 1: 24-cv-05129-JSR (filed July 5, 2024) (the “Berner/Lapp Actions”) and were pending before the same Judge that decided the Initial Warrant Litigation. These complaints generally allege breaches of the Warrant Agreement, and Berner has plead an alternative claim for violation of federal securities laws. The Court entered an order dismissing Berner’s alternative claims for violation of federal securities laws, and the Company filed answers to the complaints with respect to plaintiffs’ contract claims. The plaintiffs in the Berner/Lapp Actions have argued that these matters are substantially similar to the Initial Warrant Litigation, and that the decision (including the method for calculating damages, which the Company disputes) reached in the Initial Warrant Litigation should be binding on the Company in the Berner/Lapp Actions. The federal court has consolidated the Berner/Lapp Actions for all pretrial purposes and entered a schedule, which included a hearing on motions for summary judgment on December 20, 2024. Following the summary judgment hearing, on January 27, 2025, the Court issued a bottom-line order in the Berner/Lapp Actions granting summary judgment to plaintiffs Berner and Lapp reciting that “[a]n Opinion explaining the reasons for this ruling will issue in due course, at which time judgment will be entered.” The Judge issued its Opinion on August 7, 2025, confirming its bottom-line order, granting summary judgment to the plaintiffs Berner and Lapp and calculating damages, including pre-judgment interest at $7.8 million. The Company has appealed the opinion and judgment.

The other twelve additional suits since the Initial Warrant Litigation have been filed in the New York State Supreme Court, New York County: CSS, LLC v. Getty Images Holdings, Inc., Index No. 653527/2024 (filed July 12, 2024); Walleye Manager Opportunities LLC et. al. v. Getty Images Holdings, Inc., Index No. 653528/2024 (filed July 12, 2024); Funicular Funds LP v. Getty Images Holdings, Inc., Index No. 653410/2024 (filed July 5, 2024); MPF Broadway Convexity Fund I, LP et. al. v. Getty Images Holdings, Inc., Index No. 653411/2024 (filed July 5, 2024), LMR Multi-Strategy Master Fund Limited et al. v. Getty Images Holdings, Inc., Index No. 654963/2024 (filed September 20, 2024); Jordan Flannery v. Getty Images Holdings, Inc., Index No. 654961/2024 (filed September 20, 2024); Bi-Directional Disequilibrium Fund, L.P. et al. v. Getty Images Holdings, Inc., Index No. 654960/2024 (filed September 20, 2024); Holland v. Getty Images Holdings, Inc., Index No. 655746/2024 (filed October 29, 2024); Hunsicker v. Getty Images Holdings, Inc., Index. No. 655911/2024 (filed November 7, 2024); Dasher, et al. v. Getty Images Holdings, Inc., Index No. 655913/2024 (filed November 7, 2024); Parker v. Getty Images Holdings, Inc., Index No. 659240/2024 (filed November 22, 2024); Highbridge Tactical Credit Master Fund L.P. et. al. v. Getty Images Holdings, Inc., Index No. 650402/2025 (filed January 21, 2025) (the “NY State Actions”). The NY State Actions generally allege breaches of the Warrant Agreement and seek an award of money damages, and the plaintiffs in these actions could seek, and the courts could award, monetary damages per warrant that are less than, equal to or greater than the per warrant monetary damages awarded in the Initial Warrant Litigation. The Company filed answers to each of the complaints in response to NY State Actions on April 11, 2025. During a status conference on May 8, 2025, the Court ordered the claimants to file an amended complaint, consolidating all of the claimants. The amended complaint was filed on June 6, 2025 and the Company answered on June 26, 2025. The parties completed discovery and the plaintiffs filed a note of issue and certification of readiness for trial on December 5, 2025. On December 19, 2025, plaintiffs filed a motion for summary judgment, and on December 23, 2025, the Company moved to vacate plaintiffs’ note of issue and certificate of readiness. Briefing on both matters is complete. The court will hear oral argument on the motion for summary judgment on June 9, 2026.

It is possible that additional purported former warrant holders of the Company could bring additional lawsuits against the Company, its directors or officers, alleging substantially similar claims, or new or different claims relating to the public warrants. The Company intends to defend itself vigorously in the Follow-on Warrant Litigation and any future actions and is unable to estimate any potential additional loss or range of loss that may result from the ultimate resolution of these matters, which could be material to the Company’s business, financial condition, results of operations and cash flows.

The Company has recorded a loss on litigation relating collectively to the Initial Warrant Litigation, Berner/Lapp Actions and NY State Actions based on the criteria under ASC 450 -Contingencies (“ASC 450”) and as of March 31, 2026 held a related litigation reserve of $208.4 million with a remaining insurance recovery receivable related thereto of approximately $33.7 million in the Condensed Consolidated Balance Sheet. Although the Company cannot be certain of the outcome of any litigation or the disposition of any claims, or the amount of damages and exposure, if any, that the Company could incur, the Company does not currently believe that a material loss arising from the final disposition of existing matters, other than those in respect of which the Company has made litigation reserves as described above, is probable. Due to the inherent uncertainties of litigation and regulatory proceedings, the Company cannot determine with certainty the ultimate outcome of any such litigation or proceedings. If the final resolution of any such litigation or proceedings is unfavorable, our financial condition, results of operations and cash flows could be materially affected. Further, in the ordinary course of business, the Company is also subject to periodic threats of lawsuits, investigations and claims. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Stability AI Lawsuits

Getty Images (US), Inc. is a plaintiff in a lawsuit filed on August 14, 2025 in the United States District Court for the Northern District of California against Stability AI, Inc., Stability AI, Ltd. and Stability AI US Services Corp. The case arises out of Stability AI’s alleged unauthorized reproduction of approximately 12.0 million in images from Getty Images’ websites, along with the accompanying captions and associated metadata, and use of the copied content in connection with various iterations of Stability AI’s generative artificial intelligence model known as Stable Diffusion. Getty Images (US), Inc. has asserted claims for copyright infringement; falsification of copyright management information; trademark infringement; unfair competition; trademark dilution; and deceptive trade practices. Getty Images (US), Inc. seeks, among other things, monetary damages and injunctive relief. On October 14, 2025, the defendants moved to dismiss all of the claims other than the claim for copyright infringement. On April 23, 2026, the court granted the defendants’ motion to dismiss the claim for falsification of copyright management information without prejudice and denied the motion to dismiss with the respect to the other claims. The parties are engaged in fact discovery.

Arising out of similar alleged facts, Getty Images (US), Inc., Getty Images International U.C., Getty Images (UK) Limited, Getty Images Devco UK Limited and iStockphoto LP are Claimants in proceedings issued in the High Court of England & Wales against Stability AI Limited on January 16, 2023, which, together with the Particulars of Claim (the Claimants’ statement of case) were served on the defendant on May 12, 2023. The Claimants assert claims for copyright infringement, infringement of database rights, trademark infringement and passing off seeks, amongst other things, monetary damages, injunctive relief and legal costs.

The matter went to trial in the High Court in June 2025. During the trial, the Claimants made a strategic decision to drop the claims relating to primary copyright infringement linked to the training and output of Stability AI’s model and database rights infringement, which according to Stability AI, took place outside of the United Kingdom and was thus beyond the reach of UK copyright law, and focus on the claims related to trademark infringement, passing off and secondary infringement of copyright. On November 4, 2025, the Court issued a ruling finding in favor of the Claimants only on its claims for trademark infringement. While Getty Images was unsuccessful on the secondary infringement claim, the ruling delivered a key factual finding: that, wherever the training and development did take place, Getty Images' copyright-protected works were used to train Stable Diffusion. In December 2025, the High Court held a hearing, during which the Court granted Claimants an injunction, assessed an interim costs award to Stability AI for the matters on which Claimants did not prevail or dropped at trial, granted Getty Images’ request to appeal the decision on secondary infringement and denied Stability AI’s request to appeal the trademark decision. The Claimants have filed an appeal, which Stability AI has challenged. Stability AI has sought permission from the Court of Appeal to hear an appeal on the trademark decision. The parties await that decision.

The Court assessed an interim costs award to Stability AI for the matters on which Claimants did not prevail or dropped at trial of $5.8 million. This cost award was included in “Accrued expenses” in the Consolidated Balance Sheet as of December 31, 2025 and was paid during the three months ended March 31, 2026.

Canada Revenue Agency Tax Assessment

The Company has open tax audits in various jurisdictions and some of these jurisdictions require taxpayers to pay assessed taxes in advance or at the time of appealing such assessments. One such jurisdiction is Canada, where one of the Company’s subsidiaries, iStockphoto ULC, received tax assessments from the Canada Revenue Agency (“CRA”) asserting additional tax is due. The position taken by the CRA is related to the transactions between iStockphoto ULC and other affiliates within the Getty Images group for the 2015 Canadian income tax return filed. The Company believes the CRA position lacks merit and intends to appeal and vigorously contest these assessments.

As part of the appeal process in Canada, the Company may be required to pay a portion of the assessment amount, which the Company estimates could be up to $19.7 million. Such required payment is not an admission that the Company believes it is subject to such taxes. The Company believes it is more likely than not it will prevail on appeal, however, if the CRA were to be successful in the appeal process, the Company estimates the maximum potential outcome could be up to $28.6 million.

Note 12 - Subsequent Events

On April 16, 2026, the United States Court of Appeals for the Second Circuit denied the Company’s petition for rehearing in connection with the Initial Warrant Litigation. On April 23, 2026, the Company paid $110.9 million in judgment and associated interest related to this matter. This matter had been fully reserved for in prior periods. The Company drew $120.0 million from its revolving credit facility on April 22, 2026, the proceeds of which were used in part to pay the judgment.

As of March 31, 2026 the Company had $33.7 million of insurance recovery receivable related to the Initial and Follow-on Warrant Litigation, representing receivables from third‑party insurance carriers for these legal claims. Subsequent to March 31, 2026, $30.0 million has been received from insurance carriers and the remainder is available to the Company.

See “Note 6 - Debt” and “Note 11 - Legal Proceedings and Contingencies” for additional information.