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Vimeo(VMEO) - 2025 Q2 - Quarterly Report
VimeoVimeo(US:VMEO)2025-08-04 21:05

PART I - FINANCIAL INFORMATION Consolidated Financial Statements Vimeo reported $207.7 million in revenue and $2.4 million in net earnings for the six months ended June 30, 2025, reflecting a slight revenue decrease and a significant earnings drop primarily due to increased operating expenses Consolidated Balance Sheet Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 (In thousands) | December 31, 2024 (In thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $302,956 | $325,276 | | Total current assets | $350,364 | $374,656 | | Goodwill | $245,406 | $245,406 | | Total Assets | $620,638 | $642,821 | | Liabilities & Equity | | | | Deferred revenue | $170,724 | $161,923 | | Total current liabilities | $219,986 | $222,423 | | Total Shareholders' Equity | $391,092 | $408,797 | Consolidated Statement of Operations Statement of Operations Summary (Unaudited) | Metric (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $104,650 | $104,376 | $207,684 | $209,286 | | Gross Profit | $81,503 | $81,698 | $160,483 | $163,165 | | Operating Income (Loss) | $3,724 | $7,461 | $(2,368) | $10,050 | | Net Earnings | $6,285 | $10,121 | $2,369 | $16,194 | | Diluted Earnings Per Share | $0.04 | $0.06 | $0.01 | $0.09 | Consolidated Statement of Cash Flows Cash Flow Summary (Unaudited) | Cash Flow Activity (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,274 | $25,288 | | Net cash used in investing activities | $(4,563) | $(160) | | Net cash used in financing activities | $(35,935) | $(15,408) | | Net (decrease) increase in cash | $(22,309) | $9,383 | Note 2—Revenue - Vimeo's revenue is primarily derived from fixed SaaS subscription fees, recognized on a straight-line basis over the contract term, which is most commonly annual4243 Disaggregated Revenue (In thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Self-Serve | $57,555 | $58,374 | $113,667 | $117,481 | | Vimeo Enterprise | $24,997 | $20,051 | $49,421 | $38,518 | | OTT | $12,268 | $12,641 | $24,511 | $25,700 | | Add-Ons | $8,197 | $10,190 | $16,779 | $20,994 | | Other | $1,633 | $3,120 | $3,306 | $6,593 | | Total | $104,650 | $104,376 | $207,684 | $209,286 | - The United States is the only country constituting over 10% of total revenue. For the six months ended June 30, 2025, U.S. revenue was $112.8 million, while all other countries contributed $94.9 million46 Note 5—Shareholders' Equity - The company completed its $50 million stock repurchase program authorized in February 2022 during Q1 2025, repurchasing 3.9 million shares for $23.5 million66 - On April 29, 2025, the Board authorized a new stock repurchase program for up to $50 million of the company's common stock with no expiration date67 Note 9—Contingencies - On June 26, 2024, Vimeo entered into a settlement agreement to resolve all pending RTI copyright litigation in Italy and the U.S. The payment did not have a material impact on Vimeo's financial condition93 - The EMI/Capitol Records copyright infringement litigation received a favorable judgment from the Second Circuit on January 13, 2025, which affirmed a prior judgment. Plaintiffs filed for a panel rehearing in February 202585 - Vimeo is also involved in ongoing copyright litigation with Sony, Warner, and Universal in the Court of Milan, with a claims hearing scheduled for October 8, 202594 Note 11—Restructuring - The company recognized restructuring costs of $1.5 million in Q2 2025 and $3.0 million in H1 2025 related to departmental reorganizations, compared to $2.2 million in H1 2024 from a reduction-in-force98 Restructuring Costs by Function (In thousands) | Expense Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Cost of revenue | $46 | $90 | | Research and development | $476 | $705 | | Sales and marketing | $278 | $1,026 | | General and administrative | $729 | $1,224 | | Total | $1,529 | $3,045 | Note 12—Segment Information - Vimeo operates as a single operating segment, with the Chief Executive Officer assessing performance based on consolidated 'Net earnings'102 Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue remained flat in Q2 2025 at $104.7 million, with Vimeo Enterprise growth offset by declines in other categories, leading to a 50% decrease in operating income to $3.7 million and a 33% decrease in Adjusted EBITDA to $10.9 million Operating Metrics and Key Terms Key Operating Metrics (Q2 2025 vs Q2 2024) | Category | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | Self-Serve | Subscribers (k) | 1,156.5 | 1,298.1 | (11)% | | | ARPU ($) | 197 | 178 | 11% | | | Bookings ($k) | 64,972 | 58,644 | 11% | | Vimeo Enterprise | Subscribers (k) | 4.0 | 3.7 | 10% | | | ARPU ($) | 24,705 | 21,977 | 12% | | | Bookings ($k) | 25,595 | 23,433 | 9% | | OTT | Subscribers (k) | 3.1 | 2.9 | 6% | | | ARPU ($) | 15,720 | 17,107 | (8)% | | | Bookings ($k) | 7,364 | 7,492 | (2)% | Results of Operations - In Q2 2025, total revenue increased by a marginal $0.3 million, with Vimeo Enterprise revenue growing by $4.9 million (25%) due to increases in both Average Subscribers (11%) and ARPU (12%), largely offset by declines in Add-Ons, Other, and Self-Serve categories114115 - Operating expenses for Q2 2025 increased by $3.5 million (5%) year-over-year, primarily due to a $2.8 million increase in R&D expense and a $2.6 million increase in sales and marketing expense124125 - Q2 2025 operating income decreased by $3.7 million (50%) to $3.7 million, resulting from higher operating expenses130 Adjusted EBITDA Performance (In thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $10,935 | $16,343 | (33)% | | As a % of revenue | 10% | 16% | | Non-GAAP Financial Measures - Vimeo uses Adjusted EBITDA as a non-GAAP measure to analyze financial results, defined as operating income excluding stock-based compensation, depreciation, amortization, changes in fair value of contingent consideration, and restructuring costs138139 Reconciliation of Net Earnings to Adjusted EBITDA (In thousands) | Line Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net earnings | $6,285 | $2,369 | | Adjustments | | | | Income tax (benefit) provision | $(48) | $357 | | Other income, net | $(2,513) | $(5,094) | | Operating income (loss) | $3,724 | $(2,368) | | Stock-based compensation expense | $5,146 | $14,134 | | Depreciation | $47 | $91 | | Amortization of intangibles | $489 | $836 | | Restructuring costs | $1,529 | $3,045 | | Adjusted EBITDA | $10,935 | $15,738 | Financial Position, Liquidity and Capital Resources - As of June 30, 2025, Vimeo held $303.0 million in cash and cash equivalents and had no debt156 - Net cash from operating activities for H1 2025 was $17.3 million, a decrease from $25.3 million in H1 2024, mainly due to the timing of bonus payments149150 - Net cash used in financing activities in H1 2025 was $35.9 million, primarily consisting of $23.8 million for common stock repurchases and $12.4 million for withholding taxes on equity awards151 Quantitative and Qualitative Disclosures about Market Risk The company reports no material changes in its market risk profile compared to the disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in market risk since the last annual report filed on February 19, 2025159 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the quarter - Based on an evaluation by management, Vimeo's disclosure controls and procedures were deemed effective as of the end of the reporting period (June 30, 2025)162 - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting163 PART II - OTHER INFORMATION Legal Proceedings This section incorporates by reference the details on legal contingencies from Note 9 of the financial statements, including the settlement of the RTI copyright litigation and ongoing proceedings with EMI/Capitol and Sony/Universal/Warner - Information regarding legal proceedings is detailed in "Note 9—Contingencies" of the consolidated financial statements167 Risk Factors The company highlights its vulnerability to global economic and political conditions as a key risk, where macroeconomic uncertainties could adversely affect customer spending, renewal rates, and sales cycles, potentially harming revenue and business operations - The company's performance is dependent on global economic conditions, which are currently facing macroeconomic uncertainties like market volatility, inflation, and recession risks169 - Adverse macroeconomic conditions may lead to decreased business spending, lower renewal rates, longer sales cycles, and challenges in collecting accounts receivable, which could negatively impact revenue170 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report for the period172 Other Information During the quarter ended June 30, 2025, no directors or officers entered into, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - No directors or officers entered into, modified, or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the fiscal quarter173 Exhibits This section lists the exhibits filed with the Form 10-Q, including a separation agreement, CEO/CFO certifications required by the Sarbanes-Oxley Act, and Inline XBRL data files - The report includes standard exhibits such as CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files175