Vimeo(US:VMEO)2025-02-19 21:04Financial 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].