Core Viewpoint - Vimeo's stock experienced significant sell-offs following mixed fourth-quarter results, with revenue exceeding expectations but profits falling short, leading to negative investor sentiment [1][2][6] Financial Performance - Vimeo reported earnings of $0.01 per share on revenue of $103.16 million for the fourth quarter, while Wall Street analysts had estimated a profit of $0.03 per share on revenue of $100.59 million [3] - Revenue declined approximately 2% year-over-year, and earnings per share dropped 80% compared to $0.05 in the same quarter of the previous year [3] Future Outlook - Management plans to increase investments to drive innovation, aiming to boost sales and bookings, with Vimeo Enterprise and over-the-top-and-streaming categories contributing to 34% of overall sales in the fourth quarter [4] - The company anticipates low-single-digit sales growth early in 2025, with expectations of returning to double-digit revenue growth later in the year [5] Investor Sentiment - Despite some core offerings showing growth momentum, investors reacted negatively to the fourth-quarter results and guidance, indicating concerns over profitability and the effectiveness of previous initiatives [6]

Core Insights - Vimeo, Inc. reported a revenue of $103.16 million for the quarter ended December 2024, reflecting a decrease of 2.3% year-over-year, while EPS was $0.01 compared to $0.05 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $100.6 million by 2.55%, but the EPS fell short of the consensus estimate of $0.03 by 66.67% [1] Financial Performance Metrics - Vimeo's stock has returned +5.7% over the past month, outperforming the Zacks S&P 500 composite's +2.4% change, and currently holds a Zacks Rank 3 (Hold) [3] - Average Revenue Per User (ARPU) for Self-Serve & Add-Ons was $208, slightly above the estimated $207.95 [4] - ARPU for Other was $1,139, exceeding the estimated $1,055.45 [4] - ARPU for Vimeo Enterprise was $23,493, surpassing the average estimate of $22,998.88 [4] - Revenue from Other was $14.81 million, above the estimated $13.09 million, but showed a decline of 15.7% compared to the year-ago quarter [4] - Revenue from Vimeo Enterprise reached $23 million, slightly above the estimated $22.85 million, with a significant increase of 36.8% year-over-year [4] - Revenue from Self-Serve & Add-Ons was $65.35 million, exceeding the estimated $64.71 million, but down 8.2% from the previous year [4]

Core Viewpoint - Vimeo is optimistic about its performance in 2024 and is eager to discuss future plans for 2025 during the Q4 earnings call [3]. Financial Performance - The company has provided key metrics and non-GAAP financial measures, which should be considered alongside GAAP measures for a comprehensive understanding of its financial performance [2]. - Additional financial performance details, including reconciliations with GAAP measures, are available in the shareholder letter and SEC filings [2]. Future Outlook - The management team is excited to share insights about Vimeo's future and strategic plans for 2025 [3].

Financial Data and Key Metrics Changes - The company reported that its EBITDA in 2024 is three times all the EBITDA created in the three years prior, indicating significant financial improvement [24] - The company plans to invest up to $30 million, which is expected to yield an EBITDA of about $25 to $30 million [25][72] - The overall revenue growth is projected to be in the low single digits, with expectations for acceleration through the year, aiming for double-digit growth by the end of 2025 [26][82] Business Line Data and Key Metrics Changes - In Vimeo Enterprise, new products launched in 2024 accounted for 30% of new bookings, with AI alone contributing to 40% of bookings [23] - The enterprise business is experiencing double-digit unit growth in new subscribers and double-digit growth in Average Revenue Per User (ARPU) and Average Order Value (AOV) [36] - The self-serve segment faced pressure but saw price increases across more than half the business, resulting in double-digit AOV growth [53][65] Market Data and Key Metrics Changes - Over 45% of the company's business is coming from outside the United States, with increasing demand for multilingual video capabilities [16] - Approximately 40% of deals in Q4 were driven by the company's AI capabilities, highlighting the growing importance of AI in their offerings [17][76] Company Strategy and Development Direction - The company is focusing on investing in AI, security, and various video formats to enhance its offerings and meet customer demands [30][31] - A new chief revenue officer has been appointed to better address the needs of both smaller and larger customers, indicating a strategic shift in sales approach [48] - The integration of OTT and Vimeo Enterprise teams is aimed at leveraging the growing demand for streaming in enterprise video solutions [50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, emphasizing the importance of customer feedback in driving product development and growth [78] - The company is confident in its ability to turn the self-serve segment back to growth, supported by stable retention rates despite price increases [65][66] - The management believes that the investments made will significantly enhance growth potential and profitability [72][75] Other Important Information - The company has successfully reduced its non-GAAP operating expenses from $90 million to approximately $70 million over the past couple of years, providing a stable foundation for future investments [75] - The management highlighted the importance of AI capabilities in driving customer engagement and satisfaction, which is expected to contribute to future growth [76] Q&A Session Summary Question: Can you talk about customer adoption of AI in the enterprise? - Management noted that video usage in enterprises is exploding, with AI becoming essential for managing video compliance and accessibility [14][15] Question: Can you discuss the investment plans for this year? - The company plans to deploy up to $30 million, with expectations of significant returns in terms of EBITDA and growth [22][25] Question: What are the key drivers for enterprise booking growth in Q4? - The enterprise business is seeing double-digit growth in new subscribers and ARPU, driven by new features and a shift to higher-end products [36][38] Question: How is the self-serve segment performing? - The self-serve segment is under pressure but has seen price increases leading to higher AOVs, with management optimistic about returning to growth [52][53] Question: What is the company's approach to capital allocation? - The company is focused on balancing organic investments with returning cash to shareholders, having bought back over $30 million of stock [71][72]

Group 1: Earnings Performance - Vimeo, Inc. reported quarterly earnings of $0.01 per share, missing the Zacks Consensus Estimate of $0.03 per share, representing a -66.67% earnings surprise [1] - The company posted revenues of $103.16 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.55%, but down from $105.54 million year-over-year [2] - Over the last four quarters, Vimeo has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Vimeo shares have increased approximately 4.8% since the beginning of the year, compared to the S&P 500's gain of 4.2% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.04 for the coming quarter and $0.16 for the current fiscal year [7] - The estimate revisions trend for Vimeo is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Group 3: Industry Context - The Technology Services industry, to which Vimeo belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Vacasa, Inc., is expected to report a quarterly loss of $3.07 per share, with revenues projected at $151.03 million, down 14.9% year-over-year [9]

Financial Performance - Revenue for 2024 was $417,006, a slight decrease of 0.05% compared to $417,214 in 2023[233]. - Gross profit for 2024 increased to $326,275, compared to $325,638 in 2023, reflecting a growth of 0.2%[233]. - Operating income for 2024 was $18,683, up from $13,047 in 2023, marking a significant increase of 43.5%[233]. - Net earnings for 2024 were $27,012, representing a 22.5% increase from $22,032 in 2023[236]. - Basic earnings per share for 2024 rose to $0.16, compared to $0.13 in 2023, an increase of 23.1%[233]. - Total revenue for 2024 was $417.0 million, a slight decrease of 0.05% compared to $417.2 million in 2023[287]. - Revenue from Self-Serve & Add-Ons decreased by 4.5% from $285.5 million in 2023 to $271.7 million in 2024[287]. - Vimeo Enterprise revenue increased by 47.3% from $56.5 million in 2023 to $83.2 million in 2024[287]. - U.S. earnings before income taxes for 2024 were $30.3 million, up from $15.2 million in 2023[291]. - The total income tax provision for 2024 was $6.7 million, significantly higher than $2.9 million in 2023[297]. Market and Competition - Revenue growth has declined recently, with factors such as increased competition and slowing demand potentially impacting future performance[42]. - The company faces intense competition from large social media networks and niche software providers, which may impact its market position[52]. - The total addressable market for the company's video services may be smaller than expected, as not all businesses may be willing to pay for software-based video services[45]. - The company relies on various factors for revenue growth, including brand recognition, macroeconomic conditions, and the ability to retain and upsell existing subscribers[43]. Operational Challenges - Service interruptions can occur due to technical errors or high traffic, potentially leading to lost business and increased subscriber churn[58]. - Hosting and delivery costs are a significant component of the cost of goods sold, and unexpected increases could materially affect gross margins[59]. - The company depends on third-party platforms for app distribution, which could impose significant fees and control over marketing[60]. - The integration with third-party vendors is crucial for core services, and changes in their policies could affect the attractiveness of the company's offerings[63]. - The company has experienced interruptions in third-party payment processing, which could lead to revenue loss and increased costs[68]. - The company faces challenges in attracting and retaining skilled employees due to intense competition in the technology sector, which could impact its operational capabilities[79]. Legal and Regulatory Risks - The company is facing lawsuits related to third-party copyright infringement, which could lead to significant legal costs and liabilities[87]. - New regulatory regimes, such as the DSM Directive in the EU, may increase operational costs and liabilities for user-uploaded content, potentially impacting financial prospects[88]. - Legislative proposals in the U.S. and other regions could limit protections for online services, increasing operational costs and necessitating changes to the business model[89]. - The company may incur fines or service restrictions in certain countries due to non-compliance with content removal regulations, affecting service availability[90]. - Section 230 of the Communications Decency Act, which limits liability for hosting illegal content, may be amended, potentially increasing legal risks for the company[91]. - The company is subject to evolving data privacy laws, which could require significant changes to data handling practices and increase operational complexity[94]. - A data breach could lead to regulatory actions, litigation, and reputational harm, impacting customer confidence and financial results[97]. - Changes in privacy laws, such as those in California, may limit the company's ability to collect and process personal data, affecting product development[98]. - The company faces regulatory risks and litigation related to privacy laws, including the California Consumer Privacy Act and the Illinois Biometric Information Privacy Act[110]. - Non-compliance with export control laws could result in substantial fines and penalties, adversely affecting business operations[117]. Financial Position - Total assets increased to $642.8 million as of December 31, 2024, from $622.9 million in 2023[231]. - The total shareholders' equity rose to $408.8 million as of December 31, 2024, compared to $382.2 million in 2023[231]. - Cash and cash equivalents at the end of 2024 were $325,493, up from $301,436 at the end of 2023, reflecting an increase of 8.4%[241]. - Vimeo's cash and cash equivalents primarily consist of money market funds with a credit rating of Aaa, with no more than $100 million invested in any single bank or money market mutual fund as of December 31, 2024[259]. - The company has a dual-class common stock structure, with Class B common stock having 10 votes per share compared to 1 vote for common stock[132]. Employee and Operational Impact - The company has 64 employees in Ukraine, primarily focused on research and development, and the ongoing conflict has affected their ability to work[83]. - The company has 103 employees in Israel, and operations have been impacted due to the ongoing conflict with Hamas, potentially affecting business continuity[85]. Investment and Future Outlook - The company has a history of losses and cannot ensure sustained profitability in the foreseeable future, necessitating continued investment in research and development to attract and retain users[41]. - The company may engage in merger and acquisition activities that could disrupt business operations and dilute stockholder value, with potential difficulties in integrating acquired technologies[70]. - Compliance with global regulatory requirements may increase costs and restrict market access, impacting the company's growth potential[105]. - Increased scrutiny on environmental, social, and governance (ESG) practices may lead to higher compliance costs and impact the company's reputation[118]. - The market price of the company's common stock has been volatile, influenced by operating results and economic conditions, which could lead to investment losses[124].

Core Insights - Vimeo released its fourth quarter and full year 2024 shareholder letter, which is available on its investor relations website [1] Company Overview - Vimeo is recognized as the world's most innovative video experience platform, enabling users to create high-quality video experiences [2] - The platform serves a diverse community, including creative storytellers and large global teams, with videos receiving billions of views each month [2]

Group 1 - Vimeo released its fourth quarter and full year 2024 shareholder letter on February 19, 2025 [1] - Vimeo is recognized as the world's most innovative video experience platform, enabling high-quality video creation [2] - The platform serves millions of users, including creative storytellers and large global teams, with videos receiving billions of views monthly [2]

Financial Performance - Vimeo ended 2024 with its highest quarterly bookings in 10 quarters, achieving a bookings growth of 3% in Q4 despite a 2% decline in revenue[6]. - The company reported a gross margin of 78% and net earnings of $27 million, with Adjusted EBITDA reaching an all-time high of $55 million, over 3 times the total Adjusted EBITDA generated from 2021-2023 combined[5]. - Revenue for Q4 2024 was $103,156 thousand, a decrease of 2.6% from $105,544 thousand in Q4 2023[51]. - Gross profit for Q4 2024 was $80,254 thousand, down from $82,287 thousand in Q4 2023, reflecting a gross margin of 77.7%[51]. - Operating income decreased significantly to $1,268 thousand in Q4 2024 from $5,574 thousand in Q4 2023[51]. - Net earnings for Q4 2024 were $1,536 thousand, compared to $8,395 thousand in Q4 2023, resulting in basic and diluted earnings per share of $0.01[51]. - Adjusted EBITDA for Q4 2024 was $10.7 million, down from $13.3 million in Q4 2023, indicating a decline of 19.5%[61]. - Free Cash Flow for Q4 2024 was $10.8 million, consistent with $10.0 million in Q4 2023, showing an 8% increase[61]. - The company reported a net loss of $1.5 million in Q4 2024, compared to a net income of $8.4 million in Q4 2023[61]. Bookings and Subscriber Growth - Vimeo Enterprise bookings grew over 50% from customers with $100,000+ ARR, with annualized bookings exceeding $100 million for the second consecutive quarter[5]. - Subscriber growth reached 19%, with approximately 4,000 subscribers and a 12% increase in ARPU to over $23,000[17]. - Vimeo's Self-Serve & Add-Ons category saw a decline in revenue and bookings by 8% and 6% year-over-year in Q4, but average order values increased by approximately 30% due to new pricing[27]. - Self-Serve & Add-Ons revenue decreased to $65,350 thousand in Q4 2024 from $71,171 thousand in Q4 2023, while Vimeo Enterprise revenue increased to $22,998 thousand from $16,808 thousand[57]. - The number of Self-Serve & Add-Ons subscribers decreased to 1,227.7 thousand in Q4 2024 from 1,379.7 thousand in Q4 2023[57]. Cash and Assets - In Q4, Vimeo's cash balance increased to $325 million, up $24 million from 2024, after repurchasing nearly 6 million shares[6]. - Total current assets increased to $374,656 thousand as of December 31, 2024, compared to $351,468 thousand as of December 31, 2023[54]. - Cash and cash equivalents at the end of Q4 2024 were $325,493 thousand, up from $301,436 thousand at the end of Q4 2023[56]. - Total liabilities decreased slightly to $234,024 thousand as of December 31, 2024, from $240,688 thousand as of December 31, 2023[54]. Future Outlook and Strategy - The company plans to increase innovation investment in 2025, targeting double-digit growth in bookings and revenue, with Vimeo Enterprise and OTT/streaming representing 38% of bookings and 34% of revenue[8]. - The company anticipates Q1 2025 revenue near $100 million, with an operating loss of approximately $9 million and Adjusted EBITDA slightly greater than breakeven[49]. - The company anticipates an operating loss of $9.4 million for Q1 2025, with an expected Adjusted EBITDA of $27.5 million for the full year 2025[65]. - Vimeo's OTT product delivered mid-single-digit bookings growth in Q4, with a focus on drawing streaming customers closer to Vimeo Enterprise offerings in 2025[34]. - The company plans to utilize share repurchase authorization as part of its future strategy[95]. - The company is focused on expanding into additional international markets and enhancing its value proposition to retain paying subscribers[95]. Expenses and Cost Management - The company achieved a significant reduction in expenses, with over $100 million run rate cut since early 2022, positioning itself for future investments[36]. - Total operating expenses increased to $78,986 thousand in Q4 2024 from $76,713 thousand in Q4 2023, with R&D expenses rising to $27,678 thousand[51]. - GAAP Research and Development expense increased to $27.7 million in Q4 2024, up from $26.0 million in Q4 2023, representing an increase of 6.5%[60]. - GAAP Sales and Marketing expense decreased to $31.1 million in Q4 2024 from $35.0 million in Q4 2023, a reduction of 11.1%[60]. - Non-GAAP General and Administrative expense for Q4 2024 was $15.9 million, slightly up from $14.6 million in Q4 2023, reflecting an increase of 8.9%[60]. - Operating Income Margin for Q4 2024 was 1%, down from 5% in Q4 2023, indicating a decline in profitability[61]. Stock and Dilution - As of February 13, 2025, the total common stock outstanding is 164.9 million shares[92]. - The estimated dilution from stock appreciation rights (SARs) and stock options is 8.8 million shares, with a strike price of $5.46[92]. - The total estimated dilution is projected to be between 6.7 million and 9.0 million shares, resulting in a dilution percentage ranging from 4.1% to 5.4%[92]. - The total estimated diluted shares outstanding will increase from 171.5 million to 173.8 million shares by February 2025[92]. Risks and Market Position - The company anticipates future operational results and financial conditions to be influenced by various risks, including economic changes and competition in the online video category[95]. - Vimeo serves millions of users, with videos on its platform receiving billions of views each month[96]. - Vimeo's management does not undertake to update forward-looking statements, which reflect their views as of the date of the communication[95].

The upcoming report from Vimeo, Inc. (VMEO) is expected to reveal quarterly earnings of $0.03 per share, indicating a decline of 40% compared to the year-ago period. Analysts forecast revenues of $100.6 million, representing a decrease of 4.7% year over year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Prior to a company's earnings release, it is of ...