Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vimeo Inc (NASDAQ:VMEO) reported significant growth in enterprise bookings, driven by new AI capabilities, which accounted for 40% of customer deals in Q4.
• The company has successfully increased average order values (AOVs) in the self-serve segment through strategic price increases, leading to double-digit growth.
• Vimeo Inc (NASDAQ:VMEO) is investing up to $30 million in 2025 to drive growth, with a focus on video formats, security, enterprise solutions, and AI.
• The company has a strong cash balance of over $300 million, allowing for strategic investments and stock buybacks, enhancing shareholder value.
• Vimeo Inc (NASDAQ:VMEO) has rebuilt its management team and aligned goals for 2025, positioning itself for future growth and innovation in the video industry.

Negative Points

• Self-serve subscriber numbers continue to face pressure, with challenges in turning this segment back to growth.
• The company anticipates low single-digit revenue growth initially in 2025, with acceleration expected later in the year.
• Vimeo Inc (NASDAQ:VMEO) faces management challenges in enterprises due to the increasing volume of video content and compliance issues.
• The company acknowledges past self-inflicted issues, such as user interface dissatisfaction and pricing complexity, impacting customer retention.
• Despite strategic investments, the company must be prudent in capital deployment to ensure a return on investment and maintain profitability.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with HLF.

Q: Philip, can you talk about what you're seeing from customers adopting AI in the enterprise? A: The amount of video in enterprises is exploding, and AI is crucial for managing it. Organizations are using AI for video compliance, multilingual accessibility, and just-in-time video delivery. Our AI capabilities, like translations in 28 languages, have driven significant deals, with 40% of Q4 deals involving these features. We're making video more accessible and discoverable across enterprises. - Philip Moyer, CEO

Q: Gillian, can you talk about the investment this year, the up to $30 million you're looking to deploy? A: With a strong cash balance and business model, we're investing up to $30 million, aiming for EBITDA of $25 to $30 million. This investment will focus on video formats, security, enterprise solutions, and AI. We expect to see revenue growth acceleration, aiming for double-digit growth by year-end. - Gillian Munson, CFO

Q: Can you provide some color on the key drivers for enterprise booking growth in Q4 and expectations for 2025? A: Enterprise growth is driven by double-digit unit growth in new subscribers and ARPU. We're expanding with existing customers and seeing growth in high-end products. Investments in 2024 products accounted for 30% of new bookings. We're optimistic about continued growth in 2025. - Gillian Munson, CFO

Q: How are you addressing the self-serve subscriber numbers and pricing changes? A: We've increased prices in self-serve, leading to double-digit AOV growth. We're focusing on improving user experience and addressing customer feedback. AI capabilities will be released to self-serve users, enhancing their experience. We're optimistic about turning self-serve back to growth in 2025. - Gillian Munson, CFO and Philip Moyer, CEO

Q: Can you discuss your capital allocation strategy and the balance between organic investment and returning cash to shareholders? A: We returned over $30 million to shareholders through buybacks and have a strong cash balance. For 2025, we're focusing on organic growth with up to $30 million in investments, aiming for double-digit growth. Our strategy balances profitability with strategic investments to drive growth. - Gillian Munson, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.