Gillian Munson, CFO, introduced and welcomed Philip Moyer as the new CEO.
Acknowledgement of Adam Gross’s contributions as Interim CEO.
Vimeo Enterprise showed strong growth and customer wins in Q1.
Self-Serve & Add-Ons demonstrated product resilience and strategic scaling back of underperforming marketing spend.
Vimeo reported year-over-year growth in gross profit, net income, and adjusted EBITDA, along with improved margins for all three metrics.
The company highlighted a significant turnaround from a $10 million adjusted EBITDA loss two Q1s ago to a $12 million adjusted EBITDA gain this quarter.
Financial Highlights and Strategic Direction
The Q1 performance demonstrates the strength of Vimeo’s business model.
The company is positioned for future growth, as indicated by the positive shift in adjusted EBITDA.
Question and Answer
Key Priorities and Excitement about Vimeo
Question
What are your key priorities for the next 12 months, and what aspects of Vimeo are you most excited about after your due diligence?
Answer
Excited about the opportunity to engage with Vimeo’s diverse customer base, including demanding creators and blue-chip enterprise clients like NATO and Nissan.
Believes there are significant growth opportunities in both the self-serve and enterprise segments, driven by the evolving paradigm of video creation and consumption with AI.
Focus will be on listening to customers, innovating rapidly, and capturing the emerging trends in video.
Guidance and Factors Influencing It
Question
The guidance implies a midto high single-digit revenue decline for the next three quarters. How much of this is conservatism versus potential issues in the self-serve segment?
Answer
The guidance reflects a period of change with a new CEO and decisions regarding investments and future direction.
The company believes the low end of the revenue guide is achievable and will provide more clarity as Philip’s plans solidify.
Bookings are expected to decelerate sequentially, with headwinds from tough comps in the Video Editing (VE) segment and reduced paid marketing.
The decline in bookings from the Other business in the previous year will continue to impact revenue.
The company plans to invest incremental EBITDA in growth initiatives, contributing to the EBITDA guidance.
Revenue Mix and Outlook by Product
Question
What is the revenue mix assumption in the guidance in terms of growth between enterprise and self-serve?
Answer
While not guided by product, Vimeo Enterprise is expected to remain the strongest growth opportunity.
The self-serve segment is anticipated to face continued headwinds, with no change in the outlook by product.
Vimeo Central and Early Observations
Question
Can you discuss the launch of Vimeo Central and any early observations on engagement, collaboration, or productivity gains? How do you expect this to translate into seat growth?
Answer
It is too early to provide specific numbers as the product was launched late last year.
The company is excited about the concept of packaging products for enterprise customers and has a good pipeline of similar releases planned.
Reinvestments and Growth Opportunities
Question
Can you elaborate on the reinvestments and incremental revenue and profit growth opportunities mentioned in the letter? Additionally, could you comment on the state of the macro environment and the impact on SMBs?
Answer
The company remains confident in Vimeo’s growth opportunities despite some macro headwinds, particularly in the SMB space.
Specific plans for reinvestments and growth initiatives are still in development, and more information will be shared in future calls.
The company highlights the significant progress made in building a strong financial foundation over the past two years, enabling the current focus on growth investments.
Enterprise Customer Count and Share Repurchases
Question
What were the key drivers for the higher-than-expected enterprise customer additions in Q1? Can you discuss the potential for share repurchases and the strategy behind them?
Answer
The enterprise business continues to benefit from customers recognizing the need for a comprehensive video platform and the strength of Vimeo’s product portfolio.
Share repurchases will primarily focus on lowering dilution from share equity grants to employees throughout the year.
The new CEO expresses excitement about the enterprise business and highlights the increasing trend of organizations adopting video for marketing, internal communications, and other purposes, leading to significant opportunities for Vimeo.
