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Vimeo, Inc. (VMEO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $104.65M, flat year over year (+0.3%), with diluted EPS of $0.04; gross margin held at 78% and Adjusted EBITDA reached $10.9M, up sequentially from $4.8M in Q1 .
  • Vimeo raised FY25 Adjusted EBITDA guidance to approximately $35M from $25–$30M, maintained low-single-digit full-year revenue growth and ~$6M operating income; Q3 guidance calls for revenue ~$106M, operating income ~$2M, and Adjusted EBITDA ~$9M .
  • Segment dynamics: Vimeo Enterprise revenue grew 25% YoY to $25.0M, while Self-Serve revenue declined 1% YoY but delivered 11% YoY bookings growth; Add-Ons were -20% YoY and OTT -3% YoY .
  • Key catalyst: Raised FY25 EBITDA guidance alongside accelerating Self-Serve bookings and continued Enterprise strength; management reiterated line of sight to double-digit growth aspirations, supported by AI-driven product velocity .

What Went Well and What Went Wrong

What Went Well

  • Enterprise revenue rose 25% YoY, with bookings +9%, subscribers +10%, ARPU +12%; notable new wins included Jaguar Land Rover, Spotify, and FanDuel .
  • Self-Serve bookings increased 11% YoY—the highest rate in 14 quarters—driven by price increases, stable renewals, and ARPU +11%; management: “retention rates…continue to be strong” under new pricing/packaging .
  • Sequential profit improvement: net income $6.3M, Adjusted EBITDA $10.9M, cash from operations $19.4M, free cash flow $17.8M; stock-based compensation fell 39% YoY to $5.1M .

What Went Wrong

  • Revenue slightly missed consensus ($104.65M vs $105.76M); EPS of $0.04 materially beat a -$0.01 consensus, but year-over-year net earnings declined from $10.1M to $6.3M as growth investments weighed on profitability .
  • Enterprise bookings growth (9%) was impacted by churn of a large bandwidth-heavy customer that had under-adopted broader Enterprise features; management outlined retention and expansion process improvements .
  • Add-Ons revenue dropped 20% YoY amid commoditization of bandwidth; management expects future “consumables” (e.g., AI credits) to offset over time .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ4 2024Q1 2025Q2 2025Consensus (Q2 2025)
Revenue ($USD Millions)$103.16 $103.03 $104.65 $105.76*
Diluted EPS ($USD)——$0.04 -$0.01*
Gross Margin (%)78% 77% 78% —
Operating Income (Loss) Margin (%)1% (6)% 4% —
Adjusted EBITDA ($USD Millions)$10.7 $4.8 $10.9 $5.60*
Adjusted EBITDA Margin (%)10% 5% 10% —

Notes: Values marked with * are retrieved from S&P Global.

  • Result vs estimates highlights: EPS beat (0.04 vs -0.01); EBITDA beat ($10.9M vs $5.60M); revenue slight miss ($104.65M vs $105.76M)*.

Segment Revenue Breakdown

Segment ($USD Millions)Q2 2024Q4 2024Q1 2025Q2 2025
Self-Serve$58.37 $56.30 $56.11 $57.56
Vimeo Enterprise$20.05 $23.00 $24.42 $25.00
OTT$12.64 $12.43 $12.24 $12.27
Add-Ons$10.19 $9.06 $8.58 $8.20
Other$3.12 $2.38 $1.67 $1.63
Total Revenue$104.38 $103.16 $103.03 $104.65

KPIs and Bookings

KPIQ4 2024Q1 2025Q2 2025
Self-Serve Subscribers (000s)1,221.5 1,189.3 1,156.5
Self-Serve ARPU ($)$180 $189 $197
Self-Serve Bookings ($USD Thousands)$54,709 $61,113 $64,972
Enterprise Subscribers (000s)4.0 4.1 4.0
Enterprise ARPU ($)$23,493 $24,624 $24,705
Enterprise Bookings ($USD Thousands)$30,180 $22,620 $25,595
OTT Subscribers (000s)3.1 3.2 3.1
OTT ARPU ($)$15,814 $15,696 $15,720

Non-GAAP adjustments: Stock-based compensation down to $5.1M (-39% YoY), restructuring costs of $1.5M included in GAAP OpEx; non-GAAP gross margin stable at 78% .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 2025Low single digits (in line with previous guidance) Low single digits Maintained
Operating IncomeFY 2025~$6M (in line with previous guidance) ~$6M Maintained
Adjusted EBITDAFY 2025$25M–$30M (Q1 commentary) ~$35M Raised
RevenueQ3 2025—~$106M New quarterly
Operating IncomeQ3 2025—~$2M New quarterly
Adjusted EBITDAQ3 2025—~$9M New quarterly

FY25 Adjusted EBITDA reconciliation provided (OI ~$6.2M, SBC $26.8M, D&A ~$2.0M → AEBITDA ~$35.0M) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology initiatives40% of Q4 customer deals driven by new AI; plan to invest up to $30M in 2025 R&D; expanding AI to Self-Serve (translations, discovery) Early revenue from AI translations; pushing “agentic video” and enterprise-grade features (workspaces); accelerating roadmap Strengthening, monetization emerging
Self-Serve trajectoryQ1 bookings +6% after multi-year decline; price increases with lower churn; ARPU up; aim to turn subscribers positive over 2025 Bookings +11% YoY; revenue decline narrowed to -1%; retention stable; ARPU +11% Improving momentum
Enterprise bookings & churnQ1: leadership changes; focus on revenue vs bookings due to lumpy timing; ARPU/AOV expansion Q2 bookings +9% but impacted by a large churn tied to bandwidth-only usage; retention/expansion process upgrades; marquee wins (Spotify/JLR/FanDuel) Mixed near-term; pipeline and product set supportive
Macro/SEO/supply chain/tariffsQ1: macro uncertainty slowing some enterprise deals; not impacted by tariffs (no physical goods) Q2: pockets of macro uncertainty (tariffs/geographies; healthcare/education softness); countered by better ROAS and AI-assisted SEO/video use cases Environment choppy; execution offsets
Capital allocationQ4: >$30M buybacks at avg < $5; strong cash balance >$300M; invest up to $30M in 2025 Continuing buybacks under $50M authorization; ending Q2 cash $303M; “three legs” (invest, buybacks, M&A) with high bar for deals Balanced, disciplined

Management Commentary

  • CEO letter: “We delivered strong results in Q2…in two of the fastest growing technology markets, video and AI… We started to generate revenue and new pipeline from our discrete investments, including AI translations.”
  • CEO on Enterprise momentum: “We’re winning competitive deals… customers consolidate their video platforms into us… new technology hitting Q3/Q4 (workspaces), higher-grade security… translations monetization across entire libraries.”
  • CFO on Self-Serve: “Retention rates…continue to be strong even as we roll out new pricing and packaging… this could be a double-digit grower” (with subscriber growth more likely into 2026) .
  • CFO on capital allocation: “Three legs… invest in the business, buy back shares, and M&A… we maintain a strong cash balance and are more efficient with investments this year” .

Q&A Highlights

  • Self-Serve pricing/retention: Pricing and packaging changes supporting retention and ARPU expansion; focus on new subscribers and product engagement to drive growth .
  • Enterprise bookings and churn: One large bandwidth-centric customer churned; product roadmap (workspaces, AI translations) and customer support revamps aimed at retention/expansion .
  • Macro and search: Some geography/sector softness and tariff-related uncertainty; improved ROAS and AI tools to bolster SEO/discovery and efficiency .
  • Capital allocation: Maintaining a balanced approach (invest, buybacks, M&A) with disciplined thresholds; strong cash and free cash flow provide flexibility .

Estimates Context

  • Q2 2025 results vs S&P Global consensus:
    • Revenue: $104.65M vs $105.76M* → minor miss .
    • EPS: $0.04 vs -$0.01* → significant beat .
    • EBITDA: $10.9M (Adjusted EBITDA) vs $5.60M* → beat .
  • Implications: Street models likely lift on EBITDA efficiency and Self-Serve momentum; modest top-line miss offset by stronger margins and raised FY EBITDA guidance .

Notes: Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Raised FY25 Adjusted EBITDA guidance (~$35M) signals improved efficiency and confidence in monetizing recent product investments—an upside catalyst near term .
  • Self-Serve momentum (bookings +11% YoY, ARPU +11%, retention stable) supports accelerating revenue trajectory into H2; watch subscriber trends and product engagement metrics .
  • Enterprise remains the growth engine (revenue +25% YoY) despite a churn headwind; pipeline, security features (workspaces), and AI translations underpin reacceleration prospects .
  • Mix headwinds in Add-Ons and modest OTT declines persist; management’s “consumables” strategy (AI credits) aims to replace commoditized bandwidth revenue over time .
  • Q3 guide (rev ~$106M, OI ~$2M, AEBITDA ~$9M) frames sequential improvement; delivery against this will be a key checkpoint for margin durability and growth reacceleration .
  • Capital allocation remains balanced with ample liquidity ($303M cash), continued buybacks, and disciplined M&A—supporting downside protection while investing in growth .
  • Narrative drivers: AI product velocity, Enterprise consolidation wins, and Self-Serve recovery are the themes to focus on for estimate revisions and stock reaction into H2 .