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| Statement |
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| Within our e-commerce business, our successful customer acquisition efforts drove growth in our annual iShock subscription products of 15.2% on a reported basis and 14.2% currency-neutral |
| We delivered another quarter of impressive growth in annual subscribers, adding 95,000 to reach 202,000, an increase of approximately 88% over the corresponding period in 2022 fueled primarily by our e-commerce subscriptions, including our iStock annual and our Unsplash plus subscription |
| This reflects a reported year-on-year increase of 3.4% and a currency-neutral increase with 2.5% with EBITDA benefiting from disciplined actions taken and maintained since earlier this year to manage costs in the current environment |
| This marks our fourth consecutive quarter of annual subscriber growth in excess of 50% |
| So those are some areas that we feel good about where I can point to, you know, some strength and hopefully, we'll get to add back some things in the coming quarters as the markets normalize a bit |
| And we're very proud of our staff and we're proud of our partners that take on that coverage |
| What I can tell you is what we said in the prepared remarks, which is we're seeing really good engagement with the customers |
| Our revenue per purchasing customer remains strong at approximately $1,100 per customer |
| So you know, the mix of where we're seeing that growth is really positive for us over the long term |
| The platform is a significant breakthrough in making the BBC archival content more accessible for our customers around the world and the key progress within our overall video growth strategy |
| So you know, overall, it's a good metric for us and you know, we're excited to see where that continues to go |
| And I would just add to that, Jen, you know, Mark, I think one of the things that we haven't talked about that we're actually feel pretty good about in the business |
| We're seeing good solid renewals across the mix |
| With positive momentum in our subscription business, annual subscription revenue increased 12.6% on a reported basis and 11.8% on a currency-neutral basis, driven by further gains across our premium access and e-commerce subscription offerings |
| Creative revenue from annual subscription products grew 16.9% year-on-year and 16% on a currency-neutral basis, led by Premium Access, our largest subscription product |
| However, we did see gains in sports, which benefited from our team's extraordinary coverage of the 2023 FIFA Women's World Cup |
| Alongside our amazing pre-shot offering in custom content, we're excited to operate a complementary new service that helps our customers elevate their creativity, save them time, saving them money and does not expose them to legal risk |
| Initial customer feedback and engagement with the service has been really positive and we have already introduced new features to the service such as being able to prompt in over 70 languages |
| This expansion in EBITDA margin is a testament to our fiscal discipline implementing cost actions earlier this year at the first indication of top line headwind |
| I'm extremely proud of the work and the important role it plays to engage and inform the public |
| But we are seeing really good durable kind of customer commitment into the business across creative |
| We're hearing really good feedback |
| Annual subscriber growth continues to expand our mix of revenue from subscription products, which rose to 55.9% in the third quarter, up from 51.8% in Q2 and up from 49.4% as of Q3 2022 |
| We also saw 8.1% year-on-year or 8.3% currency-neutral growth in our custom content subscription, which provides customers with cost-effective, customized, exclusive and project-specific content to meet their needs |
| We also continue to see growth in our core markets, which includes the U.S., Canada, France, Germany, the U.K., Japan, and Australia, where we added approximately 60,000 new annual subscribers |
| We continue to execute well against our geographic expansion efforts with approximately 35,000 new annual subscribers in our growth markets across LATAM, APAC, and EMEA |
| We are very grateful not only for the staff that we have in that market covering the crisis, but also for our partners that are investing and risking their staff in those markets |
| Our video attachment rate continues to grow ending the quarter at 13.7%, up from 12.7% in Q3 2022 |
| We believe that the proactive approach we have taken to control costs and our ability to stay nimble while focusing on improved execution will best position the company to deliver on the updated guidance in the current economic environment |
| So we're seeing the benefits of that margin |
| Statement |
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| Creative results reflect pressures in the agency segment, which was down double digits year-on-year as well as impacts from the Hollywood strike with production houses largely dormant in the quarter |
| Turning to our financial performance, with revenue results reflecting adverse impacts from the Hollywood strikes, ongoing macroeconomic pressures, and a still challenging agency business |
| Based on our expectations that the fourth quarter will continue to see top-line and FX pressures, we are lowering our 2023 guidance as follows |
| As I just mentioned, this guidance assumes continued macroeconomic pressures, adverse impact from the Hollywood strikes and pressures on our agency business through Q4 |
| dollar strengthened relative to our expectations and we continue to see weakness across certain geographic and customer markets |
| I did mention, you know, on the media, entertainment and production side of things, that was worse in Q3 than what we projected and certainly what we saw in Q2 |
| While difficult to predict how quickly business can ramp up following last week's settlement with the actors' strike, we expect to see an adverse impact related to the strike through at least the end of the year |
| And as the media industry continues to struggle, not only due to the strike, but also due to the macro ad landscape, you know, we've seen some pullback on those as Jen mentioned in her remarks |
| Third quarter 2023 reported revenue was $229.3 million representing a year-on-year decline of 0.5% on a reported basis and a currency-neutral decline of 1.3% |
| The decline was driven by archive and entertainment, which were negatively impacted by the Hollywood strike as well as a challenging year-on-year compare due to 2022 events such as Queen Elizabeth's funeral and the U.S |
| Editorial revenue was $79.9 million in Q3, a decrease of 2.3% year-on-year and 3.3% on a currency-neutral basis |
| Total revenue was down 0.5% year-on-year on a reported basis and 1.3% on a currency neutral basis |
| Revenue results were also impacted by a more muted year-on-year benefit from FX than we expected due to a strengthening U.S |
| We expect adjusted EBITDA of $287 million to $295 million, down 5.8% to 3.4% year-over-year on a reported basis, and down 5.4% to 2.9% on a currency-neutral basis |
| We expect revenue of $900 million to $910 million, down 2.8% to 1.8% year-over-year and on a currency-neutral basis down 2.3% to 1.2% |
| The decline was primarily driven by lower revenue retention rates on some of our smaller e-commerce subscribers and a reduction in a la carte revenue from customers who previously exceeded their subscription download caps |
| So we've seen a softer part of the business within entertainment and in media and production side of things than even we forecast |
| As a result, our reported results lagged our estimates and we expect a strong dollar to persist through the fourth quarter |
| While it was good to see the settlement of the Ryder strike, the actors' strike continued to equate to significantly reduced content production and PR activities across our media and entertainment customers for the entirety of Q3 |
| As Jen mentioned, our revenues are down more in the editorial side of things for the reasons we referenced earlier |
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