Getty Images has just released the numbers for Q II/2005. Quarterly Highlights:
- Revenue increased 23 percent over the second quarter of 2004
- Operating income grew 39 percent to $55.5 million
- Operating margin of 30 percent
- Reported earnings per diluted share increased to $0.53 from $0.41 in the second quarter of 2004
- Exclusive of accelerated amortization of debt issuance costs of $0.05 per diluted share in the second quarter of 2005, earnings per diluted share increased 41 percent to $0.58 from $0.41
- Digital Vision and Photonica acquisitions completed and integrated
"This quarter is quite possibly the best quarter in our 10-year history," said Jonathan Klein, Getty Images' co-founder and CEO. Klein told Reuters, "not only did we sell more pictures, we also achieved significant price increases."
Revenue grew 23.3 percent to $185.3 million compared to $150.3 million in the second quarter of 2004. Excluding the effects of changes in currency exchange rates, revenue grew 19.3 percent. Operating income for the second quarter of 2005 grew 39.3 percent to $55.5 million, or 30.0 percent of revenue, compared to $39.8 million, or 26.5 percent of revenue, in the same quarter last year.
Cash and short-term investment balances decreased to $418.8 million at June 30, 2005, from $572.7 million at March 31, 2005. The decrease reflects the cash payments within the quarter of approximately $214 million related to the Digital Vision and Photonica acquisitions. - More details here.
Secondly, in another press release launched shortly later, the company announces the launch of Getty Images China (gettyimages.cn), which will enable Chinese creative professionals to search, download and license imagery from all of Getty Images' collections as well as culturally-relevant local content developed specifically for the Chinese market. All collections and local content will be accessible beginning next month through a Chinese language website, the first of its kind for the market.
"China is currently the fifth largest market in terms of advertising spending, and is poised to surpass Japan", said Jonathan Klein. Getty Images China will license all Getty Images creative stills collections as well as its image partners' collections, including both rights-managed and royalty-free images. As many as 37 collections are now available to communications professionals in China. Getty Images China also includes the assets of a joint venture partner, Unisun Group, Inc. - Details here and here.
In a very good report the Stock Asylum has some details of the conference call with industry analysts ("Getty Expands in China..."):
- The Getty CEO [Klein] made several references to "Image partners that have not been acquired", raising questions about future acquisition plans. Getty Spokesperson Deb Trevino later noted that Getty Images generates cash at the rate of about $200 million a year and "may choose to spend it on acquisitions." She gave no additional details.
- Klein again mentioned the possibilty that Getty Images could start a subscription stock imagery service. Trevino said that an announcement with full details can be expected "in the coming weeks."
- He [Klein] said Getty remains concerned about the lack of protections for intellectual property in China and said this concern is reflected in the size of Getty's Chinese investment. Klein expressed hope that the China will move to better protect intellectual property like copyrighted photographs in the coming years.
