Q1 2021 Vimeo Inc Earnings Call
Launching of corporate video library solution.
And rethinking the future of Webinars and virtual of that.
Well also plan to more explicitly target the many large companies and our existing user base.
Our free and self serve users already drove nearly 70% of new enterprise customers in the quarter, and we have yet to automate or optimize that funnel.
Finally, we expect to double our global sales force and tests of new pricing and packaging to scale more naturally with the large organization.
For Smbs, we're making it easy for any size business to reach their customers with video.
And Q1, we improved our free product and.
And our AI based video creation tool. We saw users produced nearly 1 million videos using that tool up nearly 70% from the previous quarter.
In 2020, one we plan to expand the types of videos that businesses can make using vimeo, and we'll keep pushing to eliminate the friction and creating content, while increasing the quality and performance of that content.
Finally, we're investing more deeply and partnerships, we see growing adoption with existing partners like Godaddy, Facebook and shopify as well as well as with new partners like Tictoc mail chimp hub spot and constant contact and.
We expect to launch more native integrations this year that bring the power of vimeo directly to other platforms.
I went to and with another story from the quarter about a customer and my home state of Michigan.
Right now of Michigan is experiencing the most dangerous COVID-19 outbreak and the U S and the Detroit Medical Center is on the frontline.
They've been using vimeo to educate their community about their COVID-19 response.
They wanted to video series called behind the mask that seeks to humanize the health care professionals, who are working around the clock to contain the outbreak.
Now they are having their doctors record videos to directly appeal to the unvaccinated community.
Their video messages have been seen over 15000 time, helping to educate people and get more of them vaccinated at a time when it is so critically needed.
This is the power of video.
This is why we do what we do.
On behalf of the over 800 Vimeo employees around the World. We are fired up about this journey and we look forward to sharing more next quarter.
Thank you Angela.
And Q1, we had excellent results across the board.
Later dollar of revenue growth expanded our gross margins and increased investment and our product and go to market. So let's start with the revenue.
Total revenue increased 57% year over year to $89 million and be crossed the 350 million annual revenue run rate.
Revenue increase of 149 million and was up 50 per cent of year over year.
Dash and cash equivalents at the end of Q1, where 316 million.
We have fully retired the dead due to IAC. So we expect to start our life as of public company with zero of that on a balance sheet.
I would also refer you to the shareholder table and a press release that lays out chairs outstanding and the exchange ratio and the upcoming spin.
Now, let's talk about the future.
And she said it out and rest of the day and watch we believe revenue will grow after about 30 per cent for the next many years.
This year, we expect the revenue growth rate to come down to in and around 40 per cent and queue to ask me lap COVID-19 b.
And we expect the revenue growth rate of further decelerate and bought him out at the end of the year at about 30 per cent growth.
From there, we expect our revenue growth rate to accelerate and 2022 and the investments from this year of stock of show results.
On profitability, while Q1 was another adjusted EBITDA positive quarter, we are increasing the pace of our investments and we don't expect the whole ear of 2021 to be adjusted EBITDA positive.
With the increase and therefore revenue we expect to have another healthy cash flow positive ear and 20th 21, similar to what we had and last year.
In summary, Q1 was of clear validation that the opportunity in front of email is enormous we are fortunate to enjoy tailwind from many sectors of the economy as video use cases continue to proliferate our customers of using of products more and more and our relationships with them are expanding with our product leadership repeatable sales motion predictable revenue.
And the streams and expanding margins, we are more confident and ever about our opportunity and our future.
With that now we will note of Q&A Mark Snyder from IAC will be moderating some art, let's open it up for the first question. Please.
And our first question it'll be from John Blackledge of Cowan.
Good grief can you hear me okay. Thank you and maybe the first one friendly and could you just go see the front of a roadmap and we were gone through the year and.
And then second question would be integrate sales or through 100 per cent and again this quarter over 100 per cent of could you just kind of some of the enterprise sales growth.
Is ramping and how could drive further enterprise adoption over the next couple of years and then also could you discuss the conversion trend of self serve subs to the enterprise to your.
Sure, Thank John and I'm Gonna answer all of those kind of of together because they're all important pieces of the enterprise momentum that we aren't driving and you said, we have seen great run and I mentioned this corner of of 100 per cent year on year cross and and and and there's a couple of key drivers of that as well as what we think about our product roadmap and the future.
Quite a bit there to really grow that part of the of the funnel and that brings me to sort of a product question of your road map because at the end of the day what.
We have learned and the last year is actually not just that the market is large and that we can serve that market, but actually so many customers need things that we don't yet have and we've spent the last year of building and what youre going to see in 2020. One is a series of steady launches that.
And that seek to expand vimeo of presence within the enterprise some of the examples that we've talked about include our video library. So that companies can host all of their content securely and and easily searchable way and one place we've actually already rolled that product out in beta to some of our existing customers and are seeing great.
Results.
You'll see us launch of webinar product, you'll see us look to make live production much simpler so that any marketer of employee can use it you.
And you'll see us invest and our team's functionality and.
And so these are all areas I'd say are very critical and strategic and as I look and I sit here today I look at where we stand I feel quite good about.
And so that's that's sort of the status I don't know if there's anything you would add on the sales.
Good morning, John to your question, specifically about the sales ramp.
We are seeing opportunities to expand and the U S. As we rollout of the new products and capabilities that until he mentioned, we believe that that would be of opportunity for us to further accelerate our growth.
And U S and and international markets as we talked about we are just getting started.
And are investing heavily and EMEA, APAC and and let them.
Specifically on the number of sales heads we are seeing strong demand.
The top of the funnel all of our sales productivity has been holding up very strong and in fact and Q1. It was better than what we had expected our LTV to CAC very strong north of 4.0.
So we believe that we can continue to invest and still get good ROI. So we are planning to further accelerate our sales growth and.
On the Investor Day, and you talked about and we are going to go from 75 sales heads to 150 by the end of this year, we are accelerating that and we'll probably end up more than that ESPN and the 'twenty 'twenty. One. So if you look at Youre looking looking to invest more there.
Thanks, so much. Thank you. Thank you.
Our next question, we'll go to Youssef Squali at Truest.
Great. Good morning, guys I Hope you can hear me and.
Congrats on the R&D and <unk>.
Earnings Conference call.
So I guess two of course he has for me.
Thank you for for the for the April data as well I was wondering is there anything to read into the slow down.
You've kind of shown in the numbers other than just your typical.
Tougher tougher comps that we're all expecting and second half and then maybe and Julie.
Here and you talk about the opportunity to have a really exciting.
I was wondering as you you know had your board level of meetings et cetera, trying to map out the world for the next two or three years, what are what are the gating factor to accelerating further.
I mean is it is it on the sales and marketing side, you just talked about how youre planning on double and that is that on the price. It seems like we've caught upside still need some work.
But look just for you too.
Comment on the gating factor to get you to accelerate much faster.
And considering the size of the opportunity. Thank you share yourself.
And your first question on growth, we grew 46% and April there is nothing else to read into that it's as we expected and as we've talked about we know our growth rate is going to come down as we lap COVID-19 youre going to keep seeing that throughout the rest of the ear and we'll keep printing our monthly metrics. So you will see that but what I will tell you is underlying that and you look at the map.
Tricks that we think about and we're seeing things coming and better than expected and a couple of key areas. One retention is solid and one of the big question marks that you have all of these cohorts that came in last year, we've been watching their products engagement very closely but are they going to stick around and we are seeing that we are seeing engage.
And a number of of percentage of our users who are and our customers who engage with our tools and products on a weekly basis that has held steady that percentage has not changed in two years pre and post pandemic on that enterprise side as I've shared data closer is getting shorter and you know customers are sticking.
Around we're able to expand pipeline is good.
And so really you know of I'd say generally very positive and then most importantly, and this gets to your second question, we're making good progress on our product roadmap that would probably be my biggest risk for the year is if the things that we had set out to build this year. We didn't think we would be able to ship and deliver and I'm seeing really strong progress as I mentioned our video live.
Wary of product is in beta right now and so when you. When you asked me sort of biggest risk of course, theres always operational execution to scale, our sales team and and there's tons of work. You know we are I think I've said this I thought this and the Investor day, our enterprise business. We were in startup mode. You know this is like a three year old startup there's tons of stuff to do.
But the biggest risk that we see would be not being able to build the products that we have clear validation of our customers need and want and our inability to ship those products and for them to be excellent for them to do all the things Vimeo does so well simple powerful intuitive you ex professional quality and and as I sit here today I see.
No major risks I feel better I, frankly, right now than I did a couple of months ago, because we've gotten more certainty around things like retention and demand.
And to add to that user.
And you look at April growth rate of 46%. It is helpful to look back at what the growth rates were in March and April of last year.
Revenue growth rate was 29% in March of last year. It went up to 46% in April of <unk>.
And then it Wendy so there was a.
17% increase and growth rate from March to April of last year. So this water six per cent that youre seeing is on top of that sort of 6%. So if you look at the two year stacked a revenue growth rate. It is still very solid and as we talked about earlier, we do expect revenue growth rates to come down during the during the year of Q2, we expect to come in.
And that's about 40%, maybe a percentage or two below are about somewhere around that and as we exit Q4, we do expect net revenue growth rate to come down to about 30% and Q4.
After that and 2020 two we do expect revenue growth accelerate all of the investments that we're making all of the things that until he talked about earlier today all of that will drive revenue acceleration into 2020 two and all of our focus is to really drive that acceleration of asthma. This weekend and we don't know exactly retro and it went into revenue growth.
Land up but we do expect.
This business and continue to grow at north of 30 per cent for many years to come.
That's helpful. Thank you and congrats and best of luck. Thank you.
Our next question will be from Cory Carpenter of J P. Morgan.
Thanks for the questions and I had to and you've kind of addressed this a bit but just wanted to dig and more on just what changes you are seeing maybe more from a customer usage perspective.
As the economy reopens companies return to work it sounds like it might actually be usage might be accelerating versus what people were thinking of less usage and then second just third.
And third quarter and a row of positive EBITDA. It sounds like that wasn't on purpose, but at the Investor Day last month, you did say it sounded like don't expect profitability for a few years and you just said 2021 and don't expect it. So just curious how should we think about kind of of the profit trajectory going forward and some of the puts and takes there. Thank you.
Sure Corey Ah Yeah, I mean on the.
And our customer usage and demand as I said.
We're seeing strong usage of our products across.
Across the board and that's holding up nicely.
And and you know as I also said, what we're launching new products. This year that we think is going to unlock even more usage and the demand side of it is hard to predict we are just in the early stages of reopening.
And we look at trends across Geos and all.
Crop user segments, we've yet to see anything that looks like it's an issue and I shared the stat on multiyear contracts certainly seeing a lot of companies actually say you know I was forced to adopt a video of a year ago and I kind of had to scramble and it was reactive now I'm being much more proactive and thinking about return to work and what I.
I want the future to look like and so we're actually seeing I think some companies being much more strategic and their investment and they think about the future versus being more reactive a year ago, but it is hard to fully predict I think just zooming out, though I I sort of think if we take ourselves out of the what happens and the next month or quarter and.
Think about the next quarters and years, there really is nothing that has changed and our view around the opportunity and this market. We have 4400 of enterprise customers. Today. There are many many more enterprise fortune 500, plus companies in our own base today, and then there are many more and they and the of total addressable market.
So really no major sort of concerns there and profitability.
And I'll, let and Orion answer most of this but I will just say you know we we don't see any reason to be profitable right now and I'll reiterate our view which is.
As long as we are increasing gross margins as long as we are maintaining LTV to CAC and and acceptable range, we will look to scale and take share and grow this market because that's the state of that were in right now we're really thinking about it in terms of decades not years.
Good morning, Corey specifically on the profitability. If you look at how Q1, while revenue grew 57 per cent. The gross profit dollars grew 67%. So we are actually dropping a lot of incremental margin dollars to the bottom line and honestly.
Weren't able to scale up of our strength to match that growth rate.
We did hire about 100 employees last quarter of which is about 15% addition to our employee base, so quite significant and we continue to build.
And you have to do that for the rest of the year sort of in Q2, we do expect that that of spend growth rate would actually catch up because of revenue growth rates. So we don't expect Q2 to be profitable and we don't expect all of 2021 can be profitable either we are going to be hiring significant.
The number of employees and R&D and engineering and sales so and we also have some investments that we're making on the VNS I to get our back office infrastructure.
And to be ready for being a public company. So all of those investments will start showing up and the P&L and the next couple of quarters.
And he said we have a strong balance sheet, we don't have an immediate need to become profitable.
But as we start growing in this current rate that we talked about we believe that the operational.
And you'll get the operational laborers and leverage and we should be able to get to the 20% EBITDA margin and the next five years, but we don't we're not looking for turning profit for.
And for 'twenty, and 'twenty, one and 2020, two and you are still kind of thinking through that yet we don't have a clear plan at this point.
Our next question can we go to Brent Thill at Jefferies.
Thanks, and good morning honestly on the international opportunity can you just walk through your aspirations over time outside the U S and.
And what Youre doing there to tackle that opportunity and.
From the line.
You mentioned and you weren't aiming to be profitable and the bottom line, but as you look longer term as of the business stabilizes, where do you ultimately think of the bottom line looks like from a margin perspective.
How would you talk about the balance of growth and profitability over and over time a lot of people talk about the rule of 40, how do you. How do you think about that that rule over time. Thank you.
Thanks, Brian.
And on international.
The need for video is global and our companies are global and our customers are global and I think what we have seen is that the products that we've built its turnkey, it's integrated and scalable and it works and serve the needs of everywhere and the world and so you will see us continue to push here I think we've shared that about.
And 50% of our overall subscribers and revenue are coming outside the U S. But our our non U S region do you have lower conversion rates, so for sure opportunity to get better both and just refining the products things like pricing payments localization of language and then also.
And marketing how we reach those customers that is absolutely an area that we are making progress on and then I think probably the bigger opportunity more immediately is on the enterprise side, where we're actually.
Geordie I think about two thirds of that business is in the U S. And you know, we I think about a year and a half ago started our first kind of.
International sales team in London for the EMEA region and have seen extremely strong resolved very highest sales of efficiency, where we're kind of expanding that as fast as we can we're now developing a playbook that worked and we've taken and we've just set up an office and APAC.
And we're looking to do that and Lat am and I think in general when I think of of international here. The question is really just is there some kind of significant incremental.
And investment you have to make and to your product of your motion.
Really prevent you from being able to just go after each of these markets steadily and we don't see any obstacles there there's always a little bit of work to do but it does look like we are able to do it and so and that's a big areas and try and set a big part of our sales force expansion. This year is outside the U S.
And zooming out you know a couple of years from now I think we've got a ton of opportunity to be more localized have more localized presence and so you know this is going to be this isn't going to be a quarter of couple of quarters and this will be definitely a few years for us, but we are already more global than not with I think lots of room to go.
And Brian on the long term profitability question.
And look at very at today, we are growing at north of 30% of this year and.
And it would be our EBITDA would probably be similar to what we had last year, which was about minus 5% EBITDA margin.
We have said and our medium term that we can continue to grow at 30 per cent and now have a 20% EBITDA margin.
A few things of that.
You can do from here to there to get there.
Let's start with gross margins, we have improved gross margins of about 12 percentage points or so and the last seven to six to seven quarters.
And that's a that's a very focused area for us and we've continued to improve gross margins. We are currently at about 10 of 2% and we have opportunity to further increase that we have dedicated team looking at how do we improve the efficiency of our infrastructure and storage costs.
And then what are your costs all of that and the team has done a fantastic job and continuing to improve our gross margins second thing on gross margins is as we scale we have bought.
Morse law working for Us and films of unit cost going down and also as the volume increases we do get to see a better volume pricing and we continue to get better margins. There. The third thing is enterprise revenue becomes a bigger and bigger part of the overall mix.
And we get better margins, there and we expect all three of these things would continue to help improve our gross margins then.
And then if you look at the investment areas of R&D sales and marketing and G&A.
R&D is of critical investment area for us and we talked about it we are the product leader and the market right now we want to continue to be the market leader, there and to expand our our GAAP. So we will continue to invest there.
Probably about 200 engineers this year this year and continue to invest and the future as well.
Currently our and.
R&D as a percentage of revenue is probably around the 22 23 per cent. We were at about 19 and 20% last year over time, we can get get to that number and that will help us give some operating leverage there sales and marketing. It's a question of ROI, our LTV to CAC is quite high it for as long as we are getting that level of unit economics.
We continue to invest to gain market share.
And a solo proprietor small business companies are of you know a couple of twenty-five plus of them are under employees. Then we have large organizations and enterprises and that can range from you know 25, plus employees to you know 100000, plus all the way up to fortunate and 10 company.
And you know for each of those areas has a need for video and the way we sort of thought about our products Sweet is that we are able to actually serve sort of all of those needs with a very flexible and turnkey solution and then we'd just it's all about or go to market of how we reach them I think.
And you will continue to see gross significant growth and both parts of these markets every small business that needs a website and needs of social media count as a marketplace lifting needs to drive traffic and engage with their customers on those platforms and video is the highest performing medium for them to do that and and most.
Two of those businesses are not yet using video today and we're seeing that very clearly, it's why we've been able to integrate our our products into and just places like godaddy because they see a need for their own businesses to do that so I think that's a huge market, there's like 300 million and plus S. M. B as in the world very small number of using video today.
The other side is obviously the large organizations and enterprises, we've kind of size that is there's about a million companies that have over a million dollars and revenue I think that's conservative. The reality is you know, we're seeing us and our base today, Yes. We have the you know large fortune 500 logos that we put in our per.
Has released but there's actually a ton of other companies nonprofit organizations of all kinds of all sizes, who still need video and of price points that we are offering even though the enterprise side are still quite accessible to them. So I think those really are going to be the biggest areas of our town.
And are there adjacencies for sure I can rattle off many that we look at but I'm not gonna rattle them off because we are really focused here and you know it's sort of the the challenge and blessing you have of being early and a large market is you see opportunity everywhere, you look and that they do.
Some of the structured manner and we will continue to update you as we see if you see higher upside we'll update you along the way.
Yeah.
Our next question will be from Jani of Garen at credit Suisse.
Thanks, Mike Good morning, everyone.
And as you guys kind of experiment with new pricing schemes on the enterprise side ramp your sales force.
Invest and international as well and relevant products I guess within that context, how do you guys. How are you guys currently thinking about the long term.
And opportunity to grow our booth, specifically within the enterprise business is there a chance that you guys can actually grow long term because of an enterprise beyond just the mix shift to larger customers.
At mid teens or something that looks and August two how are you guys were growing even though I think the and corporate business historically before and price started to ramp.
Yeah, I'll I'll answer at a high level, and then I'll, let Brian and kind of walk through some of the details but for sure and enterprise ARPA of aside yeah products is going to be our biggest lever again, we are launching whole new use cases that the same customer need and so our ability to monetize that is obviously, what one thing that we.
You'd expect to see and we don't think that you know very far away that would come as we rollout of the roadmap that we have.
So there is sort of just actually offering more value today, if a lot of it is live streaming events internally and externally, but youll see US do you think of as I said like corporate video library Webinars enhanced team functionality looking at live production looking at virtual events, there's a whole bunch of areas and.
I've been at Vimeo for over six years, and I've never had a road map that's as validated as the one we have today, where it's literally coming from existing customers and customers and we werent able to serve telling us that they are willing to pay for these capabilities. So I think that's a that's a really really critical of what the other one.
And is absolutely that sales motion and as I said, we're early here. There's a lot that we still have to refine and learn we are not yet best in class and you know we're scaling at the same time as the market is changing so so tons of opportunity for us to get better and most of our sales force. For example is fairly generalist and nature, we havent yet.
Your lives by Department, and and really kind of gone after very dedicated motions.
And we're going to get better at figuring out Okay, and I gave you some of the examples of of of customers earlier, who had sort of started of honesty and self serve and then become enterprise, how do we actually drive that and where concerted effort and so that's it that's a big opportunity and then pricing and packaging for sure our pricing and packaging is still very much based on.
Hosting because of our history. This year, we will be experimenting we think there are several different pricing mechanisms that we have yet to unlock our tap into that more naturally allow us to scale within organizations and better align our pricing with the success of customers.
Yeah.
And specifically with your question of ARPA growth, what we have guided to in rest of the day was that think about 15% year over year of growth rate on ARPA and it comes from really two part of it has two parts to it.
The first one is the improvement and ARPA and both Samsung and enterprise separately. So for example on Seltzer, we are seeing more and more of our customers coming and at higher tiers as they join reveal or existing customers migrating up to a higher tier overtime. So over the last three years, our ARPA of under and sales outside of gone up 40% of that kind of.
And the density of the story there on the enterprise site all of the things that until he talked about and we have a whole slew of new products coming that increases our wall-to-wall adoption within an enterprise. We also have of.
We are lending more and more large customers and intuit that we talked about earlier is another great example, where the aqua of that customer is much more than our average our book 22, K. So lager accounts more.
Use cases, and pricing and packaging all of those things would lead into higher ARPA for enterprise and the other part of it is the mix of enterprise, becoming bigger and bigger enterprise off who as you know as of 100 ex of what subset of Aqua was more than 100 ex itself with some of our booth. So as the mix gets bigger and we get the benefit from overall from that.
And overall ARPA goes up so think about the 15% kind of coming from.
Growth rates, and ARPA and blood cell covenant of price and mix impact also driving growth our growth and Agua and <unk>.
And do you think that could go over time. Thank you.
Okay.
That first question death, and it is one that we think about a lot and I do think ultimately becomes of the difference between success and it's why it when I say, our biggest risk is execution and I put this and in that bucket.
And Theres a couple of things here that we've thought about one I think you know we.
And we sort of if you think about how vimeo scaled and the last few years, we scaled organically. We've also done a couple of acquisitions and what's been interesting about that is when you acquire a company and overnight add double if two extra of employee base. It forces you to actually learn how to do this well and suddenly you have to become really good at.
At how you communicate information what are your cadences what of your processes. How do you consistently define your principles as a company how do you ensure that those principles are used and everything from how you hire how you evaluate performance and to how you reward and I can tell you. We went through a lot of learning on that back and <unk>.
And 17, and and 18 and 19 and at the time. It was it was not easy, but I look back and I've actually so glad that we experienced that because it really helps set us up for where we are now. We also you know we walk the walk we use video we've been using video of ton in our Onboarding and training of new high.
<unk> the feedback that we've been getting I meet with each of our new hires still the feedback that we've been getting is actually its the bath onboarding experience any of them of ever experienced at any of the companies that are out before even though its remote.
And we're kind of using our own tools and the power of video to learn how to do this extremely well. So that we can then provided from where companies.
But I do think you know one of those if you think about like what are the cultural things we want to keep a focus on we have we of five principles as a company that sort of define our culture versus is putting our customers. Our users first and then they're staying curious it's asking why.
And then Theres aiming high we have a culture, where we try and encourage people to take risks swing big and it's okay to fail as long as we've tried and we've tried our best we have a culture of accountability. One. It is one of our principles I think we've gotten much better here still always room to go but how do we ensure that we have somebody.
Each of our areas that are strategic who was the clear owner, who has accountability with waking up every morning living and breathing how to solve a problem and then we have a culture of being real and this is one where it's about direct transparent communication and also being yourself, we want to be a company that attracts the best talent and the world and.
And that talent takes many different forms so I think you'll see us continue to kind of improve how we deliver this these principles and of culture, how we make sure it manifest throughout the organization investing and the right programs.
In order to do that but I would say right now I feel really good I've watched of scale pretty significantly and I just literally last yesterday, we had our new higher gathering for the latest batch of Indians and every time I do those I feel so good because of the people coming in and I can just.
See that there they are the sort of there and by being that culture and the same way as when I was here you know six years ago, and we were you know 100 people. So I think where we're managing it fairly well lots of focus on this and the future to make sure that we do it as we scale.
On the multi year contracts.
We are about.
About 25 per cent of our new contracts coming in and are currently on multiyear contracts and that has been about the same for the last couple of quarters.
It's hard to predict what that would look in the future. We have a lot more new products coming online and then second half of the year. So it might change the profile of the customers to be honest.
All of us not to tell you our customers and the long term contracts, we really want our customers to come in and use our products be successful and be happy and.
And if somebody wants to come and with a one of your contract and double the contract next year, because they find extra of high value from Ramiele I'll take that money every day. So our goal is not to get multiyear contracts and customers through a period of time, but our goal is really to make sure that we make them successful and we are very confident and our product and our customer success.
And our support team all of those things that go to make the health of customer successful and that is helpful. Because really.
Our next question is from Brian Fitzgerald at Wells Fargo.
Thanks, Mark and.
Thanks, guys. The call has been really thorough so of course, so we really appreciate it two quick ones.
And launching new Gen tools for markets marketers can you unpack that a bit.
In terms of of what exactly you're launching there and then.
Obviously, Amazon knows a lot about what they're doing around video given assets like price.
<unk> and cloud front, providing hosting services and for Netflix. So it's really interesting that they turn to vimeo and amongst your customers for content anything and tell us about the decision process there.
Sure Brian.
And Legion tools, you know that was one of the product launches that we did in Q1, we've obviously had a bunch more but on that one it's really about marketers and specifically even more b to b marketers, who are looking to capture customers and leads in the video directly so enabling them to capture email addresses automatically into.
Great, though that email and email addresses in their marketing software like mail chimp or hotspot of constant contact track and engage with those customers or those leads rather and then turn them into customers and that was one set of tools of another has been enabling the use of video more and email, enabling you to create gifts that you can just embed.
Directly and and emails when you open that email you hit play and are able to then and <unk>.
And as with video, we know that that drives higher engagement and email marketing and so those were some of the examples of of tools that we launched again all ones that are users and particularly marketers have said that they really need. We also launched a bunch of other things you know one was auto close captioning and live events that has.
Scene, and we also had a couple of months ago, seeing really strong traction there I think nearly 20% of a lot of our enterprise live streams and April or using that that auto closed captioning capability. So certainly seeing good adoption that are the things that we are we've been shipping and building our are adding value.
And it really.
And sort of the Amazons decision process to use Vimeo I think what I would say is Ah.
The sort of typical decision process that we see is really twofold. There's there's.
Somebody within an organization and again it could be of sales team of support team I E coms marketing coming to us because they've either use vimeo for free of herself serve or they come across something and search.
And Google live streaming and we are in the U R. L. Livestream of Dot Coms, and we do get a lot of inbound leads that way. So that's one way that people find us.
And then of course, we have and out and as sort of of growing outbound effort, where we're actually targeting customers.
Typically the decision process is either and.
<unk> is using a different software for video today or they're not using video at all when they're not using video at all it's really vimeo, we're kind of walking them through what they can do with video and then why vimeo is simple and intuitive powerful at an affordable price that you should try it.
And where there are organizations that have actually been using another software solution.
Typically what's happening there is they're using multiple different software providers for different things. So maybe they have of videoconferencing tool they use for meetings and theyre trying to hack that for large events, but it's not working and then their marketing team of using a different sort of legacy video hosting provider.
And then their support teams using something else and we're coming in and saying we can actually do all of that and one integrated turnkey way with a really intuitive experience that your employees are going to actually enjoy using and because it's all consolidated its also at a much more.
Better price than what you would do if you had all of these different providers. That's a really calm and one Intuit was an example, and their Ian mentioned Hallmark is another example from the quarter and both of these cases. These are companies that had existing solutions that were complex clunky, maybe didn't provide the level of quality and.
Ability and convenience that they wanted and they were able to kind of get much more value out of vimeo, and so I think youre going to see more and more of all of those things happening you'll continue to see us winning them.
Logos, because we're we're sort of providing and we're integrated experience at a better value prop and you'll also see us continue to get more customers, who have just not been using video and what's really happening is video is replacing email or chat or of meeting instead.
Thank you very helpful.
Our next question is from Tom champion of Piper Sandler.
Hey, good morning.
And I'd love to hear you just talk a little bit about the SMB product and maybe the cute.
Product development priorities, there and how important are your partners like.
Godaddy and Shopify and customer acquisition. Thank you.
Our we are super excited about the prospects on the F. N B side and you know in general if we just take a step back and when we think about the SMB market as I said every small business that has a website or of social media account wants to use video they want to use video to drive traffic to their website or their store and they want to use video to <unk>.
Gage instead of image and text because they know it is more engaging it is just too hard today, even with the tools that we have out there and I mentioned, our AI video creation tool.
It helps produce over a million pieces of content and Q1, but it's still too hard and so we're really our roadmap is about demystifying and democratizing that entire process for and F. N B's of that professional quality video is achievable and that comes is it literally at every point of the process. So.
It's not just how to create a video it's actually.
What story should I tell what marketing message should I give how do we provide inspiration and template highs. It so that it's easy for any kind of business to say, hey, I'm, a I'm of real estate agent I can go to Vimeo and we're gonna have a ton of information on what kind of real estate listing videos do well for you and then it's actually helping them produce the content.
And there we're trying to help them produce the highest quality branded professional quanta content with the fewest number of clicks and the fewest number of minutes.
And make it their own that and it's actually distributing and publishing that content understanding how it's performing and so youre going to see out of it every single state I, just mentioned do more and more to make it easier you're also going to see us use our data. This is kind of goes beyond just beyond just the software and the tools actually use our data to feed our.
AI. So that we are helping these businesses dynamically and automatically create higher performing content. So we can we know what colors and pacing and music and faces perform well for each vertical how do we bring that into the hands of of these users and I would describe where we are today, it's very very early still and again.
Small business is not yet using video so lots of opportunity there and term.
And of where partnerships set I would describe that is also quite early and if you actually look at like the subscriber numbers today, you know that.
And the sort of Biz Dev or partnership channels, not yet of major channel, but what we are seeing a very good signals that it will be and that's based on some of the partnerships that we've done that I've talked about as well as the ones that we have and our pipeline you will see us launch of new partnerships in the coming months and generally what we're seeing is.
And pretty much all of these large platforms their customers do want to use video and these platforms are saying well. Okay. If we wanted to build that ourselves. It's complex. It's a major investment it takes institutional knowledge and has risks and of defocus those loss from the other things that we do and here's vimeo with this incredibly great solution and a brand that our users love.
And they're making it easy.
And we're not licensing our technology and a white label basis and its branded powered by Vimeo and what I think has been most encouraging are two things one that we are seeing these platforms be comfortable natively, putting vimeo and their product and then actually driving their customers off of their platforms to vimeo.
And we've been doing that with Godaddy you can do a certain set of things for free within godaddy using Vimeo and then if you want to do more.
Go Daddy actually surfaces that callout and their product as they go to vimeo and you're automatically of customer we're actually seeing a lot of platforms like that model and I think that's something that is unique and it probably is a combination of the products of of being video and of our brands. So that's a big one the other thing. We're seeing is we're seeing very good traction and okay. Once were.
And these platforms did they want to expand our prominent and usage are we actually getting users over to vimeo are those users converting and what I will say there is all signals point to this can be of real customer acquisition channel for US we are investing more deeply here, we're growing that team, we're putting more of engineering.
The source of I don't think youre going to see it materially and our numbers per se until 2020, two but but every month that goes by I would say more and more of validation that this is an exciting opportunity for us and it will allow us to acquire customers and a more scalable efficient.
Efficient way as well as the of competitive differentiator and the future.
Thank you alright.
Alright, I think we have time for one more question. So let's take the last one day will go to our goal of Rooney and at Wedbush.
Hey, Thanks, guys and you actually answered most of my question and the previous answer, but just to follow up on the partnerships.
Maybe.
And the social side you highlighted the partnership you talked about that a little bit there.
A greater opportunity to keep pushing into social media and social commerce.
And the partnership is driving more of the SMB side or enterprise or is it really.
Thanks.
I'll answer it the life of our first wishes, we put more effort initially on F. N b, but we are seeing traction on both of them and if I look today, I'd say, where we're further along and F&B, but we're ramping up our enterprise efforts and you will see us look to take the same model of natively integrating our tools as we were doing and the F&B side you'll.
And look to see us do that and enterprise collaboration software.
And so we will be launching partnerships and that area and the coming months. So I'd say, both are huge opportunities and F&B might be a little further ahead, but I think we're going to make up ground, there and and both will be strong and the future.
In terms of social we do see really good traction here, you know I've talked to and the path of we have of Facebook partnership that continues to go really well and we're expanding it and tic Toc, we actually just did a pilot program with them, where we used our creation tool works with some of their users to help them create tick talks.
A really really exciting results. There. So we're looking to expand that partnership I would say if you look across all of the social networks and platforms. Generally there is an opportunity for us to grow linked and is another example, and so you will see us do that and I think ultimately what we're seeing is on.
And those platforms, they Wanna get great content on their platforms and if vimeo can basically be a provider of a sort of of pipelines for them to do that that's really exciting and in particular, obviously of these platforms are making money they monetize with advertising so our ability to help the any business.
Create these professionally produced high performing and is actually really aligned with their incentives. So I think you can expect more on the social side with.
With Facebook, Tictoc and others from us and the future, but I definitely think it's aligned and then on commerce, Yes. That's an area that we are looking at obviously each of these platforms is investing there so I won't share too much other than where to come from us on that side. That's certainly an area. We're looking at.
Thank you.
Great.
Thank you all and thanks for thanks.
Thanks for all of them.
Interest and questions here and really appreciate you joining earlier in the day during a busy earning season looking forward to talking to you next quarter. Thank you.
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