Earnings call transcript Q2 2023

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Ken Goff

Hi. I’m Ken Goff, Vimeo’s Head of Investor Relations. Thank you for watching our Q2 2023 interactive earnings video.

Before we begin, a few comments: First, Vimeo’s Q2 earnings video and shareholder letter are available on the Vimeo Investor Relations site.

Second, this video will discuss Vimeo’s outlook and future performance. may believe,” by such “we typically “we such statements. statements “we expect,” anticipate” forward-looking be words preceded as These or similar are to Commission video. (the These and and in which filings subject this are our “SEC”), from the further actual the cause which expressed results with Exchange forward-looking our materially described and to Securities could in differ views uncertainties, risks views

key should metrics certain We considered and non-GAAP GAAP regarding have also and including These provided measures. financial substitute in to, forward-looking addition certain measures. a for be information in measures, as isolation our not or from,

well Additional can in on posted Investor financial be performance, and supplemental Vimeo’s Relations information our the our website. section in reconciliations as earnings release regarding with with Thank as measures, found filings you. in information comparable GAAP Vimeo’s of including SEC, the

Gillian Munson

and Hi thank joining earnings interactive for video. everyone, our you QX’XX

Shareholder details our the can we you find published afternoon, on the with commentary as a quarter, results and here This outlook. around Letter well financials and as

several is Cloudconnect, dbt, a served co-founded, an Adam Heroku, and high including senior Cribl, Before later our held In from performance I leader, the been like of self-serve as he excited board Adam’s how Adam and September two he the companies into Salesforce to Adam including for SaaS industry-leading in two company years investor and Buildkite. on roles companies, startup expanding to a sold Tailscale, quarter, growth, past has wealth the member Heroku, Dropbox. of subsidiary, have CEO CEO advisor at a say starting am to Gross and to active a companies I’d Xst. and a as as and Salesforce enterprise. for Interim business getting experience has started XXXX

looking we Adam him month has September forward time on X. for us are part the full with and been to to time last moving

of of profitability track strategy assets as that company, make drive more with growth, will he and already significant companies video we I’m member, product-led is board simplifying a the accessible to record Vimeo to scaling aligned to and future. Vimeo our return continue experience, in transition the As confident insights, for be all. to his

a video which you Adam with here. provided short us see intro can

for the stage We next next all are Vimeo past six would CEO endeavor. company. excited the Anjali Adam, to best the Sud, in with luck thank her and of of her the wish contributions of her for We years, to like our

reconciliations driving our terms, GAAP quarter’s Turning can to In find million non-GAAP the my revenue one in delivered business QX, million $XXX talk moving $XXX you track model some in and the to EBITDA, terms closest that to bookings, financials, through this in we results the future. on and growth and confidence we million $X quarter in Vimeo’s our in will Shareholder adjusted to Letter. we reinforce are profitable

Some of QX. highlights from the

as than points. grew First, up we to percentage shift Enterprise work tailwind a represents larger making in bookings a XX% by growth percentage represent return bookings, six to mix XX% bookings posture. of total This of overall nice to Vimeo QX Other a

logo Vimeo Second, Self-Serve basis retention products. what was Enterprise retention we and are seeing was by a were both are XXX% retention subscriber improved and on in over our stable on encouraged bookings and we key dollar sequentially. NRR year-over-year.

with last non-GAAP QX more $X in million million, of year-over-year get efficient to an our decline operating investing EBITDA promise versus our on delivered future, an improvement expenses year. of and adjusted XX% while $XX for we Third,

of the in reduced year-over-year we Fourth, X% of our X% by bookings decline two rate versus to points QX.

Vimeo Enterprise. year-over-year, bookings grew X% we Excluding by Other, led

the with Anjali which AI-powered discuss here. creation can see you innovation paid of video investments an off our Fifth, release suite,

Foods sign Porsche web and for impressive for their on both Beyond quarter, for highlights marketing and video video including library, social. organizing continued to Volvo, Diageo Whole executive and for the for and comms, Enterprise, we these customers managing Vimeo

how You lead can see click to Vimeo for company events, gen. external workflow here management Monday.com using webinars, and is

our above QX slightly $XXX revenue outlook, be expect we to million. to Turning

We down due sequentially timing basis, million. adjusted in on coming be certain largely QX to an expect dollar near EBITDA of the absolute $X expenses, to

from For of EBITDA full million, decline, due the we $X a expectations primarily range $XX million to are expect and guidance adjusted to the our year performance million quarter. second in year updating full in the continue mid-single we of million, EBITDA range be revenue, to $XX digit percent our to up to strong $XX prior adjusted

you XXXX quarter. We to updating earnings watching you Thank video. our next forward look for QX again

Adam Gross

thank and joining QX earnings XXXX morning you Vimeo’s for Q&A. Good live

a Before begin few comments. we

available recorded and later First, relations be will this today. the site on Vimeo investor session

and differ discuss to we typically outlook actual “we subject These the our “we views anticipate” performance. Second, will or such be today. future expressed by Vimeo’s similar forward-looking and results uncertainties, statements. preceded materially statements and risks expect,” may as believe,” “we forward-looking are These statements to from words such

We provided certain including substitute information metrics be a or isolation in for forward-looking These addition financial GAAP non-GAAP measures. certain not our considered measures, measures. key as from, have should also in regarding and to, and

in Relations supplemental including our regarding Investor and website. well on letter as our information filings of SEC, with with section in posted be as the information Additional financial comparable Vimeo’s GAAP shareholder measures, the performance, reconciliations can Vimeo’s found

will I turn it that over to our CFO, With Gillian.

Gillian Munson

CEO. the Vimeo’s Munson, to for and happy Good morning. Gillian Thank our QX quarterly Vimeo's Gross, you earnings I for I'm earnings joined by name Session. am Adam time XXXX on CFO, be Q&A first joining Interim recently

is about a Vimeo. Adam on things has quickly ramping been for month up all and with us

member of the two Vimeo’s SaaS as to him wealth and of space as particularly over given on board, a his We the a experience leader are past board have in excited years.

working forward looking all him forward. are We going to with

from Q&A, mention highlights I’ll quarter. the into jump few a we Before main the

believe continue we return back to this to we on year. in track the First, to are bookings of half growth

And with It's still look that will in the making questions. showed easier control up, communication help be make platform with our we all. very creation world. suite, off innovation am margin of can progress in against this in profitably gross your to business more that evolution goals. operating third, good expenses pay the of for and we improved days and I could still initiatives products facilitating taking continue video terms investing can believe costs which believe accessible Vimeo's are Second, part where particularly our go, We video confident we down efficiency while and video AI-powered quarter. we and to our forward early year-over-year

Operator

at Our Wells Brian? first Brian comes question Fargo. Fitzgerald from

Brian Fitzgerald

We're welcome. with working looking you. Adam, to forward Thanks.

wondering you or could share is we to like role, you Given anything your about new if there experience with you. what bring SaaS in to past, Thank just priorities business businesses in go-to-market? strategy operating the any and an are would the

Adam Gross

much question. Yes, three am things I up thanks for so speed Really here. I excited about the as to get

technology. the is first The

are business. days impact video's on of I the think early seeing we in

I video think it as bringing in going strategic expand it's the find and decade evolves we have ahead enterprise ways – customers to to an the opportunity exciting to applications an as with be for partner we value is in them. our what and video to new

a much the is looking and them hand board and up continue with them the strategy. the been helped get the in And had to two team. boardroom, of I working as team execute years. for so second to management of speed very a forward that's the with quickly the and in on working member recruiting we most really I've to

innovative how Heroku, marry have Dropbox self-serve is kind go-to-market past, that places and experience my technology with Salesforces really Dropboxes have successful of last you like our companies with you the common the look is done model. the and at And in connect the to you innovative go-to-market the really at at business And business. really like world. my models. Salesforce if enterprise to the really opportunity look themes And at one able when our of again, And career look the being and we and the of

a think I opportunity that's us here. for exciting really

Operator

Our Tom? Piper Champion at Sandler. from next question comes Tom

Tom Champion

morning, everyone. Good Thanks.

around and the product if and for talk video early First AI-powered available and the could the Gillian, is curious, self-serve creation experience question suite about here if is you customers. just enterprise

last there. think the that and a tool I stat you upload video quarter bookings users interesting an around creation shared related use and

Just curious thinking into plays here. the if that

Anjali Sud

want you do Do to start you want… me there Yes. or

Tom Champion

Please. please. Yes,

Gillian Munson

Okay.

AI So very it's the on new. suite,

that remember that with video it's accessible, to to it's give been and is a So goal users. we Vimeo's a main throughout for strategy, the too which I product, early more stats think make you all with important the but doing, AI on in business of use journey variety it's a places on particularly while, to how of our AI quite for

productive one creation on great a throughout our And Vimeo. And theme using get is up fast can and so how is suite of you just example the that video AI products.

So to use I it. encourage all you

earnings research it helpful You for over you process to it's know something for make reports time. every for to and your probably I can if even us video make faster been that done tool it calls, whole for get the use scary, less easier, you a will, of some us, use day.

about of we've this strategy, continues tools. are of we folks a trend. last just lot folks about lots I video, use gone to to how is the the tools create that really that has of distribute think Vimeo And time expanded different customers talked to terms the and In talked products. uploading of who the this, video, a who those how the we've one using Vimeo And type amend are video, be from

lower available upgrade products and the higher end to the At handful creation product have of end AI our self-serve you'd tools. The to suite is line, products. of the AI our enterprise a on in use

Tom Champion

if makes should just odd All remind I a in maybe know but just bit sneak that us, be quarter, Okay. this little thinking a how more. was of one about investments or SBC and could that I about with than curious of generally through us balance the result about better and How we Does make that investing margins Maybe year to growth? stabilize remind Gillian, it the to help sense investing more the self-serve grow thinking the top of you funnel behind are other business? think within behind expected. sense.

Gillian Munson

Sure.

snuck Tom, going not You there, you questions to on I'm get but two that. in

Okay.

that's So a to at Vimeo. couple dilution the ways. stock-based the been journey our gave at really in a key with represents happen had we we we comp, in stock-based amount to too The are to on comp us free we to that shareholders XXXX. different in look for going terms is of think a it and bring business, thing we little a and away, And think comp particularly stock-based we that stock as down of

the we and down that that. have are as Some of into that doing we company, was management a meaningfully just on gold new had to bring team to a required but come ourselves path

that initiative seen of of comp also the stock-based a management and indicator reflects board bit little last changes and some happen of quarters. you've Now, expense is over trailing a the couple

benefit. her taking So at is, cumulative actually her. that for look reason she taken Anjali of expense when we of had QX, specifically be stock-based some won't to shares departure, our was reverse the had for And you the some we as a the announced comp with

So that's what is. that

dilution I around which $XX million think talked forward $XX when those of stock-based going terms more million work that sit the look as too and sure quarters With look today. number. keep few we hard comp, be here running was on changes overall, ago our we think I lower a this that different we $XX quarter, felt Now, and million make we we at where were we to rate, high to quarterly about a burn all a in the we in in are figures to

and business believed the inherent Vimeo investing, always terms have in that we strong of expenses is Then capability has profit that really profitability. great in Okay. and so

gross have to saw, we've margin, a We expenses XX% as continuing been you down. bring

a thing in we profitable really be XXXX period, we and in show can think is we've that free I cash can done get one revenue even positive. nicely flow transitional

growth bit time are that little of while underlying to actually uncertain delivering profitability and transitional investments continued also an a investing. we're really balance drive and So time a in trying to

more be is profitable, the inherently are actually making. the some delta the there investment we think but So could we business of

on focused focused really really product, great are products customers are getting We to on making sure we're the our easily.

us but now, sort and our so trade-offs also think doing investments cash for strong a position while profitability position between nice puts really really thing the I sheet, in our right cash make that, and investment, is do are to And we great to those will generating flow that we continue make balance a company. of which

Tom Champion

Thanks for the comments.

Gillian Munson

You're welcome.

Operator

come will question at next from Our Cowen. Kerr William TD William?

William Kerr

you. thank Great,

about just in re-acceleration and bookings and thinking revenue? better should how and we Could the bookings on relationship So touch especially between than you was encouraging. maybe XQ growth we a be trends in enterprise the expected was the booking lot fundamentally then current

Gillian Munson

to. Absolutely. Happy

been of you as So working know, bookings. our period through a we've down way

in five I your last of happens think precede the revenue. bookings what four were your down bookings quarters, is and

started to seen quarters, last in last fallen the you've trends. of what those revenue see So have has three the as well couple following and is – quarters booking that

return this path So strategy, as we all That's follow. we to look business, about. then bookings growth. are bookings want And we at talked our to and as we've want we on the profitably, to revenue a believe that we to do would to growth, and return

is of the in doing bookings And and and by to got of around work can terms to believe the get the continue in of in oriented the by QX back end year. letter growth way move lot of is So decline we we couple year. our bookings great, lift believe, we reduce lot of to of We we've confirmed everything a shareholder to we do the the are rate that business, that. in but we to which the a did heavy points, a end

about bookings is we’ve bookings. business. just OTT offsetting as it think of has frame XX% great about That’s as in by And down a it’ll that under you to business product, strongest how we the is indicator, percentage is continue of in continue and bookings our our that which believe percentage and closer which you bookings. that’s ongoing as we of us some that deprecating. leading the to to for It really the addition, growing product other, growth products quarter in been a to see think VE As the be was of about VE a XX% now where and led been

the gets overcome thing – the the always lead core VE through talked is and we’ve that comes as growth. into that business will which In the now middle So of self-serve, VE the growth us is growth about, and self-serve.

turn to the our of all growth and as to year. well to led want be self-serve, hope that overall business it’s rates a portion headwind the small as of time. growth end will such growth by bookings so get way of we to Putting our other VE, the going the portion that over much be it be not work a to as to together, on And to we you’ll of turn we

So about that’s how we’re it. thinking

William Kerr

sub of Great, you and you. that to how on think great. the Thank self-serve, into And that as is, getting about growth coming over kind back rolls my versus pricing second question, you that which stabilization do quarters? get

Gillian Munson

higher it back self-serve, terms seeing you’re Yes. in at of the you’re and customer, of all macro business mirrors level financial overall decline. sub to have of use to bookings and a those to are look the what see we the in product better, Vimeo focused if sort going seeing for are that that terms you’re In beneficial you’re a business. what seeing you step is declines customer, customers in going – on on retain But basis, self-serve more, start a what for factors we think see business

AOV So in over AOV, starts to up digit the we bring nice And where double trying in saw starts growth time are ARPU self-serve. in? we do customers work in with really with you It quarter. it

overall but takes to a it ARPU, through while strategy. roll AOVs those your the Now that’s

we the businesses the a mix shift we’ll time. is say So the bit subs my growth business little to is towards at probably ultimately over place a suspicion be faster where continue as than ARPU

bookings the of will working pricing X terms the to back in is in of that like growth. everything now, factor both then on the and looks of be And subs terms Right what turning company velocity.

William Kerr

Great. the you Thank time. very much. Appreciate

Ken Goff

next question Chris from at will come Zhang Our Chris? Truist.

Chris Zhang

situation business have I [indiscernible]. Yousaf level steady this and growths you Hi. is self-serve for behalf as Thank on think enterprise the What both the of Vimeo? you. of question for state normalized do

Gillian Munson

we’re to focused business getting back overall right growth. Well, the really now on

make – guide where, and the by to growth, So your self-serve, VE digit want to understand want get to people we growth we you’re get figure of time. that’s growth business, in continue having very And sure land then it back growth, believe to going to then XX% of where back I I’ll then what we’ll outsized to have Vimeo. is really strong come double kind as at really and back the quarter, rate we we’re not we growth, but framing. don’t out to over we

turning to then growth overall to long-term But always would right kind is product that to rates. that growth But stronger peg the too growth back I VE portfolio. of in now expect the strong by growth our virtue overall orientation much have of and will our see self-serve back turning bookings around VE soon growth you

Chris Zhang

time. the Appreciate you. Thank

Ken Goff

Our Lustberg will David? David from next question come at Jefferies.

David Lustberg

good morning and wanted product ARPU if helpful? going different based dynamics. about ask Thanks be seat declines and I David tease wondering between what’s on for the can you Vimeo out Brent. on versus guys. This to the is was Enterprise, mix would there Around

Gillian Munson

Absolutely.

ARPU to sizes you a and ARPU, growing fast, been to We about business get overall it’s to of in So with in we when mix higher. VE mix of a sort this you for of $XX,XXX customer have to challenge are companies we an overall. that think quite new price points that both course, is share quarters And The going has a have and ARPU. wallet incoming customer you ultimately few higher get can think here.

through. it’s to expect we go little lumpy but because still bit up, a work way it business, over a can be smaller So we time as our that

customers sizes particularly quarter. at notable trends the there look customer are that or between were in – we when So no

overall get aim is up. ARPU think to our I

making would that that along indicator that get our number another we’re There’ll of be factors there, progress be a NRR.

saw were NRR the you as that XXX% was we is So coming and up. of last where quarter again in over quarter, well as kind

to NRR we to we’ll want up. AOV up, come want But move we we move customer we any And move are – excited to so wants up, really whenever also to move want to ARPU Vimeo.

in this the time, them we’ll So than for take. move of up that opportunity us over ARPU stage if early and an in come can business, people we growing that’s the lower

positive. to to it time for the the averages same So probably will a the the trend but take is little move, is

business, Vimeo’s was up the then And overall ARPU of than business. years couple over it to growth and think it overall and we’re in as VE’s Vimeo, doing less $XXX has ago result work VE as two relates a I at you last when the meaningfully look come some the other of years

David Lustberg

Got lower little then, But of get raise about And XXX%. a that trended said that follow-up I and cohort it’s me and you of normalized over more increase of, off I dynamic feel past quarter, versus you we environment? or that maybe to if plan higher. more then time question like consecutive that a continuing of know know steady could it. helpful. a guys maybe Is be turned we’re two kind that same? on NRR. if hey, on next you this That’s you over any bit how Maybe on around guys the you as to that more to But specifically high came the COVID could my quarters I you beat super And on, to it’s think the numbers. color, last provide locked

Gillian Munson

The more don’t COVID almost and of much very, was have NRR. too self-serve VE – took to to do really small we in with off. cohorts of the grown very kind on cohorts It post-COVID is much more has kind has the factors really couple COVID really business. that do That into with business a business. our a meaningfully period. Yes,

new NRR, grail of of the bringing sales teams use they’re of Vimeo. of our terms In their being terms And well functions holy what with force in in think it customers. terms to of as we their features at expanding and customers a all both as that’s happy, enterprises as aiming we’re the relationships of product

that. really expand inside sign of a ARPU by a So we’re good us NRR doing The across expanding to both that way job company. expect at is we use a is customers to the good Vimeo

department do the to HR So the say, use to people always really team. it. finance HR and that use Vimeo over believe marketing the then the that’s might finance partner fly will to out to dead team my because way and But a the wait, whole idea. start video and tends expand I, and start one course, oftentimes is the this while simple of team team over it in want in oh Vimeo should actually marketing then then and here more

of bring the that to of expansion So continue out people with and all of expansion new the it’s be using number of both Vimeo features cool features. going to kind we

lines So where strategy it’s sits. along both is our

David Lustberg

Thank Great. you.

Gillian Munson

You’re welcome.

Ken Goff

this hand there further point, are I’d back no Gillian. questions. the call to At to like

Gillian Munson

for you Q&A. a XXXX live our QX day. joining updating you Thank We great to Have quarter. next again forward look

Vimeo (VMEO) 2 Aug 232023 Q2 Earnings call transcript