Vimeo(VMEO) - 2025 Q1 - Quarterly Results

Letter to Shareholders CEO Philip Moyer highlights strong Q1 2025 performance, bookings growth, Adjusted EBITDA profitability, and a new $50 million share repurchase program Q1 2025 Performance Highlights | Category | Metric | Value | | :--- | :--- | :--- | | Self-Serve | Bookings Growth (YoY) | 6% | | | ARPU Growth (YoY) | 8% | | Vimeo Enterprise | Revenue Growth (YoY) | 32% | | | ARPU Growth (YoY) | 16% | | | Customer Growth (YoY) | 11% | - The company is investing up to $30 million incrementally in 2025, primarily in Research & Development, to accelerate growth in future years[9] - Product innovation accelerated with over 30 releases in Q1, including new AI captions and translations for Self-Serve subscribers to cater to global audiences[5][8] - The Board authorized a new $50 million share repurchase program on April 29, 2025, after the company repurchased $24 million of stock in Q1[5] Q1 2025 Financial & Operational Highlights Vimeo's Q1 2025 financial and operational highlights cover segment performance, profitability, balance sheet, cash flow, and full-year guidance Q1 Financial Overview Vimeo reported Q1 2025 total revenue of $103 million (down 2% YoY), $101 million in bookings (up 3% YoY), a $4 million net loss, and $5 million Adjusted EBITDA Q1 2025 Key Financial Metrics ($ in millions) | Metric | Value | | :--- | :--- | | Total Bookings | $101 | | Total Revenue | $103 | | Gross Margin | 77% | | Net Loss | $4 | | Adjusted EBITDA* | $5 | | Adjusted EBITDA Margin* | 5% | | Cash Used in Operating Activities | $2 | | Negative Free Cash Flow* | $3 | | Cash & Cash Equivalents | $289 | Bookings & Revenue Year-over-Year Change | Metric | Q1 2025 YoY Change | | :--- | :--- | | Bookings | 3% | | Revenue | (2)% | - Vimeo has updated its disclosure framework, resulting in the separate reporting of Add-Ons (previously with Self-Serve) and OTT (previously in Other) to better align with evolving operations[15] Vimeo Enterprise Vimeo Enterprise achieved strong Q1 results with 32% revenue growth and 13% bookings growth year-over-year, expanding its subscriber base and ARPU Vimeo Enterprise Q1 2025 Performance (YoY) | Metric | Growth Rate | | :--- | :--- | | Revenue | 32% | | Bookings | 13% | | Subscribers | 11% | | ARPU | 16% | - Key feature launches to enhance enterprise readiness included LMS integrations, custom subdomains, EU data residency options, and federated search APIs[21][25] - In early Q2, the company launched 'Vimeo Streaming,' an enterprise-grade offering for live and on-demand distribution, which is expected to merge with OTT operations over time[22] Self-Serve The Self-Serve segment achieved its first bookings growth since Q1'22, with 6% year-over-year increase driven by price increases despite subscriber decline Self-Serve Q1 2025 Performance (YoY) | Metric | Growth/Decline Rate | | :--- | :--- | | Bookings | 6% | | Revenue | (5)% | | Subscribers | (11)% | | ARPU | 8% | - The 6% YoY bookings growth marks a turning point, being the first growth quarter since Q1'22, largely attributed to price increases for Plus and Pro users[26] - A new AI-driven video translation feature was launched in Q2, utilizing an AI credit system to enable a flexible, consumption-based payment structure[27] OTT The OTT segment experienced Q1 bookings and revenue declines of 5% and 6% respectively, while strategically integrating with Vimeo Enterprise for future 'Vimeo Streaming' offerings OTT Q1 2025 Performance (YoY) | Metric | Growth/Decline Rate | | :--- | :--- | | Bookings | (5)% | | Revenue | (6)% | | Subscribers | 4% | | ARPU | (9)% | - The OTT business is being strategically integrated with Vimeo Enterprise and is positioned to become part of the 'Vimeo Streaming' product[30] - Positive Q1 trends for OTT included a substantial increase in pipeline, average order value on new deals, and bookings renewal rates year-over-year[30] Add-Ons & Other Add-On revenue declined 21% YoY in Q1, prompting a strategic shift to a consumption-based model, while 'Other' revenue fell 52% due to product deprecations Add-Ons & Other Q1 2025 Revenue (YoY) | Category | YoY Revenue Change | | :--- | :--- | | Add-Ons | (21)% | | Other | (52)% | - The company is transitioning Add-Ons to a consumption-based revenue stream, beginning with the new AI translations offering and AI credit system[34] - The decline in 'Other' revenue was largely due to product deprecations[35] Expenses & Profitability Vimeo plans an incremental $30 million investment in 2025, primarily for R&D, with Q1 showing an 8% increase in GAAP operating expenses, a $4 million net loss, and $5 million Adjusted EBITDA - The company intends to invest an incremental $30 million in 2025, largely in R&D for growth initiatives such as AI, enterprise security, and innovative video formats[38] Q1 2025 Profitability Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Gross Margin | 77% | -1 ppt | | Net Loss | $4 million | vs. $6.1 million Profit | | Adjusted EBITDA* | $5 million | -61% | | Free Cash Flow* | ($3 million) | vs. $6.9 million | - Q1 GAAP operating expenses increased by 8% YoY, led by an 11% rise in R&D spending to support growth initiatives[40] Balance Sheet & Cash Flow Highlights Vimeo ended Q1 with $289 million in cash, reporting negative $3 million Free Cash Flow, and completed a $50 million share repurchase program, with a new $50 million program authorized - Ended Q1 with $289 million in cash and cash equivalents[49] - Reported negative $3 million in Free Cash Flow, largely due to early-year bonus payouts, $24 million in share repurchases, and tax obligations[49] - Completed a $50 million share repurchase authorization and the Board approved an additional $50 million program. Common shares outstanding decreased by 3% YoY to 164.0 million[50][51] Guidance Vimeo reaffirms full-year 2025 guidance, projecting low single-digit revenue growth, an operating loss of approximately $3 million, and Adjusted EBITDA between $25 million and $30 million Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Revenue Growth | Low single digits | | Operating Loss | Approx. $3 million | | Adjusted EBITDA* | $25 million - $30 million | - The company continues to hope to end 2025 with a line of sight to double-digit growth in future quarters[53] GAAP Financial Statements This section presents Vimeo's unaudited GAAP financial statements, including the Consolidated Statement of Operations, Balance Sheet, and Cash Flows Consolidated Statement of Operations Vimeo reported Q1 2025 total revenue of $103.0 million, an operating loss of $6.1 million, and a net loss of $3.9 million, or ($0.02) per share Q1 2025 vs Q1 2024 Statement of Operations ($ in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $103,034 | $104,910 | | Gross Profit | $78,980 | $81,467 | | Total operating expenses | $85,072 | $78,878 | | Operating (loss) income | $(6,092) | $2,589 | | Net (loss) earnings | $(3,916) | $6,073 | | Diluted (loss) earnings per share | $(0.02) | $0.04 | Consolidated Balance Sheet As of March 31, 2025, Vimeo's balance sheet shows total assets of $605.7 million, with $289.0 million in cash and cash equivalents Balance Sheet Highlights ($ in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $289,028 | $325,276 | | Total current assets | $336,901 | $374,656 | | TOTAL ASSETS | $605,716 | $642,821 | | Deferred revenue | $164,711 | $161,923 | | Total current liabilities | $212,625 | $222,423 | | TOTAL LIABILITIES | $223,182 | $234,024 | | Total shareholders' equity | $382,534 | $408,797 | Consolidated Statement of Cash Flows In Q1 2025, Vimeo used $2.1 million in cash from operating activities and $32.1 million in financing activities, resulting in a net decrease of $36.3 million in cash Q1 2025 vs Q1 2024 Statement of Cash Flows ($ in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,095) | $5,590 | | Net cash used in investing activities | $(2,114) | $(160) | | Net cash used in financing activities | $(32,105) | $(2,193) | | Net (decrease) increase in cash | $(36,254) | $3,096 | | Cash at end of period | $289,239 | $304,532 | Supplementary Financial Information This section provides supplementary financial details, including disaggregated revenue, non-GAAP reconciliations, and dilutive securities Disaggregated Revenue and Operating Metrics This section details Q1 2025 disaggregated revenue and operating metrics for Self-Serve, Vimeo Enterprise, and OTT segments, including revenue, subscribers, ARPU, and bookings Q1 2025 Disaggregated Revenue and Metrics (in thousands except ARPU) | Category | Revenue | Subscribers | ARPU | Bookings | | :--- | :--- | :--- | :--- | :--- | | Self-Serve | $56,112 | 1,189.3 | $189 | $61,113 | | Vimeo Enterprise | $24,424 | 4.1 | $24,624 | $22,620 | | OTT | $12,243 | 3.2 | $15,696 | $9,066 | | Add-Ons | $8,582 | N/A | N/A | N/A | Reconciliations of GAAP to Non-GAAP Measures This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow, for Q1 2025 and the full-year 2025 outlook Q1 2025 Reconciliation of Net Loss to Adjusted EBITDA ($ in millions) | Description | Amount | | :--- | :--- | | Net loss | $(3.9) | | Add back: Income tax provision | $0.4 | | Add back: Other income, net | $(2.6) | | Operating loss | $(6.1) | | Add back: Stock-based compensation | $9.0 | | Add back: Amortization of intangibles | $0.3 | | Add back: Restructuring costs | $1.5 | | Adjusted EBITDA | $4.8 | Q1 2025 Computation of Free Cash Flow ($ in millions) | Description | Amount | | :--- | :--- | | Net cash used in operating activities | $(2.1) | | Add: Restructuring costs | $0.9 | | Less: Capital expenditures | $(0.1) | | Less: Internal-use software development costs | $(2.0) | | Free Cash Flow | $(3.4) | Principles of Financial Reporting & Definitions This section defines Vimeo's non-GAAP financial measures (Adjusted EBITDA, Free Cash Flow) and key operating metrics (Subscribers, ARPU, Bookings) for clarity in financial reporting - Adjusted EBITDA is defined as operating income excluding stock-based compensation, depreciation, amortization, changes in fair value of contingent consideration, and restructuring costs[75] - Free Cash Flow is defined as net cash from operating activities, excluding restructuring costs, less capital expenditures and capitalized software development costs[80] - The report defines its core offerings: Self-Serve (online subscriptions), Vimeo Enterprise (sales-led offering for teams), and OTT (over-the-top video monetization solution)[87][88][89] Dilutive Securities This section details Vimeo's potential share dilution from outstanding securities, including SARs, Stock Options, and RSUs, with a sensitivity analysis at various stock prices Estimated Dilution at Various Stock Prices (Shares in millions) | Share Price | Common Stock | SARs & Options | RSUs | Total Estimated Diluted Shares | % Dilution | | :--- | :--- | :--- | :--- | :--- | :--- | | $6.00 | 164.7 | — | 6.5 | 171.2 | 3.9% | | $8.00 | 164.7 | 0.8 | 6.5 | 172.1 | 4.4% | | $10.00 | 164.7 | 1.4 | 6.5 | 172.6 | 4.8% | | $12.00 | 164.7 | 1.8 | 6.5 | 173.0 | 5.0% | Other Information This section includes a cautionary statement regarding forward-looking information, outlining potential risks and uncertainties, and provides a corporate overview of Vimeo - The report contains forward-looking statements subject to risks and uncertainties, including economic conditions, regulatory changes, competition, and the ability to retain subscribers[102] - Vimeo is described as a video experience platform enabling users from creative storytellers to large corporations to create and share high-quality video[103]