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VI

Vimeo, Inc. (VMEO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $103.0M grew sequentially and exceeded Wall Street consensus; diluted EPS was -$0.02 vs consensus -$0.03, both modest beats, while gross margin compressed to 77% and Adjusted EBITDA was $4.8M . Revenue consensus was $101.4M and EPS consensus -$0.03; values retrieved from S&P Global*.
  • Self-Serve bookings turned positive for the first time since Q1’22 (+6% YoY), driven by price increases with lower churn; Vimeo Enterprise revenue grew 32% with stable retention and double-digit ARPU growth .
  • Management affirmed FY 2025 guidance: low-single-digit revenue growth, operating loss ≈$3M, Adjusted EBITDA $25–$30M, and authorized a new $50M repurchase program; Q1 cash ended at $289M after $24M buybacks and bonus payouts driving negative FCF .
  • Product momentum: launch of Vimeo Streaming, expanded AI captions/translations with consumption-based credits, EU data residency, and enterprise security; industry/press recognition highlights AI leadership and platform strength .
  • Near-term stock catalysts: Self-Serve reacceleration, enterprise momentum, new AI monetization vectors, and buyback authorization; watch margin trajectory amid elevated hosting and R&D spend and potential macro-driven deal timing .

What Went Well and What Went Wrong

  • What Went Well

    • Self-Serve bookings +6% YoY and highest dollar retention since Q3’21; ARPU +8% YoY, indicating pricing actions are sticking with lower churn (“we increased prices… and saw actually lower churn rates”) .
    • Vimeo Enterprise revenue +32% YoY; ARPU $24,624 (+16% YoY), subscribers +11%, pipeline up; notable enterprise wins/renewals (FIFA, Tubi, Qualtrics, LSE) .
    • Accelerating product cadence (30+ releases) including Vimeo Streaming and AI translations/credits; industry awards (Digiday Best Digital Video Platform, Best Use of AI; Webby honorees) reinforce positioning in AI-led video .

  • What Went Wrong

    • Gross margin down to 77% from 78% in Q4’24 and Q1’24 on higher hosting costs; GAAP operating expenses up 8% YoY (R&D +11%) as growth investments ramped .
    • Net loss of $3.9M; Free Cash Flow -$3.4M on bonus payouts, repurchases, and capitalized software, despite Adjusted EBITDA of $4.8M .
    • Enterprise bookings growth decelerated vs tough +47% prior-year comp and sales team transitions; management notes enterprise “lumpiness” and focus shifting toward revenue over bookings as deals increase in complexity .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$104.6 $103.2 $103.0
Gross Margin (%)79% 78% 77%
Adjusted EBITDA ($USD Millions)$16.1 $10.7 $4.8
Adjusted EBITDA Margin (%)15% 10% 5%
Net (Loss)/Earnings ($USD Millions)$9.3 $1.5 $(3.9)

EPS vs estimates (Q1 2025):

MetricQ1 2024Q1 2025 ActualQ1 2025 Consensus
Diluted EPS ($USD)$0.04 -$0.02 -$0.03*
Revenue ($USD Millions)$104.9 $103.0 $101.4*
  • Bolded interpretation: Vimeo delivered a modest beat on revenue and EPS versus S&P Global consensus; EPS less negative than expected and revenue above consensus. Values retrieved from S&P Global*.

Segment Revenue Breakdown:

Segment Revenue ($USD Millions)Q1 2024Q4 2024Q1 2025
Self-Serve$59.1 $56.3 $56.1
Vimeo Enterprise$18.5 $23.0 $24.4
OTT$13.1 $12.4 $12.2
Add-Ons$10.8 $9.1 $8.6
Other$3.5 $2.4 $1.7
Total$104.9 $103.2 $103.0

Key KPIs:

KPIQ1 2024Q4 2024Q1 2025
Self-Serve Subscribers (000s)1,341.6 1,221.5 1,189.3
Self-Serve ARPU ($)175 180 189
Self-Serve Bookings ($USD 000s)57,671 54,709 61,113
Enterprise Subscribers (000s)3.7 4.0 4.1
Enterprise ARPU ($)21,203 23,493 24,624
Enterprise Bookings ($USD 000s)19,935 30,180 22,620
OTT Subscribers (000s)3.0 3.1 3.2
OTT ARPU ($)17,331 15,814 15,696
OTT Bookings ($USD 000s)9,593 9,208 9,066

Liquidity and Cash Flow:

  • Cash & equivalents: $289M; CFO: -$2.1M; FCF: -$3.4M; share repurchases: $23.8M in Q1 (3.9M shares) .
  • New $50M repurchase authorization approved April 29, 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 2025Low-single-digit growth (affirmed in Q4 outlook) Low-single-digit growth Maintained
Operating LossFY 2025Not explicitly guided≈$3M operating loss New
Adjusted EBITDAFY 2025$25–$30M (with up to $30M growth investment) $25–$30M (affirmed) Maintained
Growth InvestmentFY 2025Up to $30M primarily in R&D Up to $30M primarily in R&D Maintained
Share RepurchasesOngoing$50M program active (Q4’24) New $50M authorization (no expiry) Raised/Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Self-Serve pricing & churnPricing/packaging optimization; aim to return to growth; stable retention despite price increases Price increases with lower churn; bookings +6% YoY; ARPU +8% YoY Improving
Enterprise momentumLarger AOVs; integrations/security; double-digit growth; OTT resilience Revenue +32%; bookings +13%; sales structure changes; focus shifting to revenue over bookings Solid but lumpy
AI initiativesTranslations, enterprise-grade AI; early traction; Vision Pro/spatial formats roadmap AI translations rolled out to Self-Serve; AI credits (consumables); “agentic video” and discovery features Accelerating
Macro/Deal timingEfficient marketing spend; cautious but investing Some deals slipped to Q2; emphasis on cost takeout for customers; no tariff impact Mixed/cautious
OTT to StreamingOTT stabilized; combining with enterprise motions Launch of Vimeo Streaming; OTT to integrate over time Strategic pivot
Security/Compliance & EU dataData residency plans; enterprise-grade security (HIPAA) EU data residency (Germany, Belgium); custom subdomains; federated search; Alibaba moderation in China Expanding
Capital allocationBuybacks; strong cash; invest up to $30M Completed $50M authorization; new $50M program; cash $289M Shareholder-friendly

Management Commentary

  • Strategic focus: “After 2-plus years of rightsizing… we are now at a place of investing to drive growth… Self-service bookings grew 6%… Vimeo Enterprise revenue was up 32%” .
  • Pricing & retention: “We increased prices… gave customers more… saw actually lower churn rates… expecting continued growth” .
  • AI and monetization: “Translations capability… security for every customer… AI credits enable consumption-based monetization… ~45% of our customers are international” .
  • Enterprise execution: “Bookings can be very lumpy… increasingly focused on revenue… contracts can require fulfillment before revenue recognition” .
  • CFO on investment discipline: “Up to $30M… don’t expect it to be more… be very responsible… capitalized some expense because projects are bigger” .

Q&A Highlights

  • Self-Serve trajectory: Analysts probed pricing durability and retention; management emphasized lower churn with price increases and ongoing rollout to higher-priced plans .
  • Investment magnitude: CFO reiterated up to $30M growth investment, balanced with EBITDA $25–$30M and disciplined project review each quarter .
  • Macro/enterprise bookings deceleration: Acknowledged deal “slippage” to Q2 and tough comps; focus on revenue over bookings as contracts get larger and more complex; cost-takeout value proposition resonating .
  • AI roadmap & financial impact: Expansion of translations to Self-Serve; “agentic video” capabilities; consumables create in-period revenue and ARPU tailwinds .
  • Industry mix: Strength in marketing, education, and regulated industries where AI assists compliance and discovery .

Estimates Context

  • Q1 2025 results vs S&P Global consensus:
    • Revenue: $103.0M vs $101.4M consensus — bold beat on top line .
    • EPS: -$0.02 vs -$0.03 consensus — bold beat (less negative loss) .
    • Implication: Consensus likely to nudge up on enterprise growth and AI monetization visibility; monitor margins given hosting cost and R&D ramp.
MetricQ1 2025 ActualQ1 2025 Consensus
Revenue ($USD Millions)$103.0 $101.4*
Diluted EPS ($USD)-$0.02 -$0.03*

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Self-Serve reacceleration and higher ARPU signal a healthier core; pricing actions with lower churn are a meaningful positive for bookings-to-revenue trajectory .
  • Enterprise remains the growth engine; expect lumpiness but stronger revenue orientation as deal sizes scale; watch ARPU/AOV and retention metrics .
  • AI consumables (credits for translations) introduce a new in-period monetization lever likely supportive of ARPU and incremental revenue over time .
  • Gross margin pressure from hosting and elevated R&D is a headwind; track mix effects (enterprise vs add-ons/other) and efficiency gains to stabilize margins .
  • Strong cash and renewed $50M buyback provide downside support; dilution reduced with 3.9M shares repurchased in Q1 .
  • Guidance intact: low-single-digit revenue growth and Adjusted EBITDA $25–$30M despite up to $30M investments; execution against Self-Serve subscriber growth and enterprise sales transitions will drive sentiment .
  • Near-term trading: Positive bias on beats and product momentum; sensitivity to margin/FCF trajectory and any macro-driven enterprise deal timing should be monitored into Q2 .

Notes on non-GAAP:

  • Adjusted EBITDA excludes stock-based compensation, depreciation/amortization, and restructuring; Q1’25 Adjusted EBITDA $4.8M vs GAAP net loss $(3.9)M; FCF definition excludes restructuring and contingent consideration, less capitalized software and capex .