Vimeo Inc

NASDAQ:VMEO

Q1-2025 Earnings Call

[Gillian Munson, executive]

Hi. I'm Gillian Munson, Vimeo's CFO, here to welcome you to our Q1 2025 earnings results. Before that, I encourage you to read through our safe harbor disclosures on investors.vimeo.com. While you will be able to find much more detailed information in our shareholder letter, 10-Q and earnings Q&A, which you can find at investors.vimeo.com.

I wanted to highlight 3 key themes from our Q1 results in this video. Funny enough, these are the same 3 themes from Q4. One, indicators continue to show that we can grow Vimeo. Two, our pace of innovation is accelerating, thanks to our investments. And three, our future is bright. Our business model continues to be attractive and puts us in a good position to make growth investments profitably.

First, let me address growth. In the quarter, we grew our bookings 3% year-over-year, the third consecutive quarter of year-over-year bookings growth. While we have a number of indicators that make us enthusiastic from continued double-digit enterprise growth to high and rising in many cases, retention to increasing ARPUs, the most exciting thing this quarter and something those of us who have been with Vimeo for more than a couple of years have been waiting to say is that Self-Serve returned to bookings growth in Q1.

Self-Serve bookings grew 6% year-over-year in the quarter, the first growth quarter since Q1 of 2022 and the highest growth since late 2021. As Self-Serve represents 60% of our bookings and 54% of our revenue, this is a fun moment for our company and is a testament to the hard work of our team. Certainly, Self-Serve is not our entire business and the economic environment presents some unknowns across our business. But as our biggest product line and as bookings growth tends to precede revenue growth, this is a very encouraging sign and a good indicator to us to reinforce our belief in our opportunity ahead.

Second, our pace of innovation is increasing, thanks to growth investments in the business. We have 4 key areas of investment, and the team is adding talent and focusing effort on solutions, enterprise security, innovative video formats and AI features. Our pace of product releases picked up in Q1. I would highlight 2 releases in early Q2 that are particularly exciting, our streaming product and AI translations with an AI credits consumption model, and you will see this reflected in our spending. In Q1, non-GAAP operating expenses grew 7% year-over-year, with non-GAAP R&D expenses growing 14% year-over-year. This increased pace of investment is very intentional for us, and it's something we believe we can do given how meaningfully we have adjusted Vimeo's cost structure over the last 3 years.

For context, between early 2022 and late 2024, Vimeo removed roughly $100 million run rate from our cost structure. In 2025, we plan to reinvest up to $30 million in our growth initiatives and expect to manage our adjusted EBITDA to no less than $25 million. As a result of this work and of our strong business model, we are making these investments from a strong financial base. Our cash balance was $289 million at the end of Q1 despite accelerating our investments in growth and completing our stock repurchase authorization of $50 million with $24 million in share repurchases during the quarter.

And third, our future is bright. We made this point on our Q4 call, and it's worth repeating, 2025 for Vimeo is about building our position as the world's largest and most trusted private video platform, investing in our business, particularly in R&D and delivering growth acceleration. We are affirming our 2025 guidance, but we'll absolutely need to remain vigilant as the current economic environment could impact our growth. We continue to strive to grow revenue in the low single digits and manage adjusted EBITDA to $25 million to $30 million, reflecting our desire to invest up to $30 million in growth.

Thanks for watching, and we look forward to taking your questions on our Q&A session and in our ongoing interactions with you in 2025.