Q3 2021 Vimeo Inc Earnings Call

Good morning, and thank you for joining Denise Q3 earnings event, we're excited to be here in front of you.

Before we begin a few comments first session will be recorded and available on the Vimeo Investor Relations site later today.

Second we will discussing his outlook and future performance. These forward looking statements typically may be preceded by woods, such as we expect we believe we anticipate or similar such statements. These forward looking to you as a subject to risks and uncertainties and actual results could get a materially from the views expressed today.

We have also provided information regarding sit in key metrics and a non-GAAP financial measures, including sit and forward looking measures.

These should be considered in addition to and not as a substitute for or in isolation from GAAP measures.

Additional information regarding Jimmy as financial performance, including be Conciliations with comparable GAAP measures can be found in the earnings release, and then you'll filings with the SEC as well as in supplemental information posted any investor relations section of our website.

With that I'll turn it over to a C O <unk>.

Good morning, everyone.

I'm happy to report strong results for the third quarter highlighted by 33% year over year revenue ground and continued velocity and expanding our enterprises, but he was late.

For growing day by day, alongside our opportunities that global use their reach and paying customers can find increasing value in our product.

And in the way of our resource thing the company to serve them.

We now have over 1100 opinions pursuing our mission a professional quality video for all.

That mission is more relevant now than ever.

Employees and teams are increasingly using our platform to work to learn and to communicate.

And its workforce them get more distributed and demographics of all it's clear that we're at the very beginning of how video will be adopted beyond traditional video conferencing.

Because why wouldn't every organization wants to be video first in the future why wouldn't every employee wants to create and share content easily.

We're building software that will lower the barriers of time cost and complexity. So that one day the over 1 billion knowledge workers in the world can bring professional quality video into their work.

I said last quarter that the path to success won't be a straight line.

We're still young company, making bold changes to our product, who we sell to and how we sell.

It started the year with an ambitious roadmap and we're delivering on our pace of innovation.

A pace of sales on the other hand has been harder to know as he moves through Covid and go after new markets and use cases.

As a result, we thank our path to 30% revenue growth will be further out.

The videos right to win is not just intact. We think it's more validated today than it was a few months ago.

We are seeing businesses unlocked the power and video customers are upgrading from our free and self serve user base and are all in one solution is increasingly differentiated against market alternatives.

Here's what gives us confidence.

First we are swiftly expanding our enterprise products sweet and we're heading traction.

Historically, we sold a single product to large companies the ability to lives for me, that's like town halls and product watch it.

This year, we have expanded our solution to serve multiple use cases and department.

We launched video library this summer and this week relaunched vimeo events, a new way for marketers easily deliver stunning virtual events and webinar.

What we're seeing with these launches is that are all in one strategy is resonating with customer.

We're seeing a significant increase both year on year and quarter over quarter and the percentage of our enterprise customers, who used to or more products within our sweet.

And our pipeline remains healthy in fact pipeline for companies with more than a thousand employees is up over 150 per cent year on year.

So now we're winning deal that we couldn't have a year ago, including with companies like Whirlpool bear and Moody.

Who are both replacing existing vendors with them, yeah, and adopting multiple products and are sweet.

Video Library is a great example, we've onboarded more than 500 enterprise customers to the products since launch.

And we're seeing that over 50% of these customers have already expanded the number of admin and contributor seats in their accounts.

That's exactly what we want to see more people using our product more often.

We're also seeing that video library customers are more willing to sign multiyear deals and are starting at larger deal sizes.

For example, we side our largest vimeo enterprise deal ever in September a multiyear contract with a fortune 500 retailer who is paying us over six figures a year to power both their live events and their video library.

We replace a competitor to win the steel based on our strength and quality reliability and U S.

Then this week, we launched vimeo events Amelia events introduces webinar functionality for BTB marketers things like event registration and management viewer level of tracking marketing software integration.

That opened incremental Tam up for us and we haven't served B b marketers historically.

I think the most exciting part of any of <unk> is that it includes a do it yourself live production studio that's designed for any employee to run virtual of that without the need for a dedicated production team.

Meaning anyone from and in turn to the C. E O can stand up Ah Sleekly produced event it from their browser using drag and drop functionality and preset scenes in graphics.

This helps expand our Tam even further because now every employee can be eaten events pro.

We've been testing vimeo events and data with customers like Medtronic Zendesk and have spot and believe we have all the ingredients to serve them in ways others can't.

Some more broadly vimeo events allows us to deepen our presence in marketing department, where we can unlock more sure wallet.

And of course this new functionality comes with the rest of our all in one solution. So that every event can be automatically recorded transcribed and organized and accompanies video library and can be edited and sure shared internally or with the world.

We expect to maintain our pace of innovation this quarter and in 2022.

And I'm confident in our team's ability to deliver as they have done throughout this year.

Our roadmap is designed to increase employee team and customer engagement and to bring vimeo closer to business workflows, there's much more to come.

Now are adopting our pace of sales to match her pace of innovation.

We can now sell multiple products and reach different decision makers in the enterprise.

We aren't best in class, yet, but we're moving fast to refine the way we segment customers and number specializing our sales force to go after different segments with more focus.

In queue for will also be welcoming more season staff veterans to our leadership team to help us get to best in class faster.

As we do this we continue to see our consumer scale and freemium funnel fuel our enterprise business.

In Q3 are free and self serve users once again drove over 70% of new enterprise customers.

This is an incredibly strategic asset for us and the transfer look healthy and growing.

Are leading indicators include the growth of team account and the number of corporate domain registration.

Both of which are up more than 50% year on year.

We're now evolving our pricing and packaging to better monetize this bottle over.

Over the next few quarters, we're moving from a storage based to a per seat pricing model that will better align willingness to pay with the success of our customer.

Now, it's worth calling out the magnitude of this change for Vimeo.

Shifting how we price is a foundational change and it may be a volatile period of your test her way into success.

But this in my mind is the final missing teeth, and <unk> transformation, one that can unlock conversion retention and expansion level levers that weren't available to us before.

It's an essential part of our long term success and we are fully committed to executing it.

I'm excited to see the fruits of the flavor in the coming years.

And finally, we're continuing to invest in this deb partnerships to feel that funnel.

We recently announced an integration of our Vimeo record tour with Sigma.

As well as a partnership with Apple and Dolby.

As we continue to scale and deepen existing partnership.

Doing that with linked in Tic, Tac Shopify and Facebook.

Every partnership we strike helps us diversify our user acquisition.

And gives our users more utility across the internet, which means more reasons to stay with the meal.

So in summary, this company has an exciting future.

More and more customers are coming to us with a vision for company wide usage of video and our product is helping them get their.

Most importantly, the things that we expect will drive a longterm value remain robust.

Our tailwind are accelerating we're delivering valuable products in an all in one solution and we're fundamentally improving how we price market and sell in an effort to build the most scalable flywheel in the market.

With that I'll pass it over to your iron to walk through our financial results and what to expect.

Thank you and please.

Thanks again, everyone for joining a call today.

Q3 results was strong across the board for the first time in Vimeo history quarterly revenue cross the hundred million, Mark and was up 33% year over year with healthy growth across bookshelves and enterprise.

We added roughly 33000 paying subscribers and ended the quarter with more than 1.6 million total subscribers up 14% year over year.

Or put into three was $242 an increase of 15% compared to two three of last year.

While our food may fluctuate in the shock, though I'm actually first new pricing and packaging, we expect both our enterprise an overall awkward to increase over the long term actually land and expand in large organizations.

On the enterprise side, we now have over 6000 being customers and our enterprise revenue grew more than 60% of this walker.

Especially pleased to note that enterprise now represents almost 30% of revenue this quarter up from the low twenty's a year ago.

Our enterprise and that's Avenue would attention remains healthy fifth or sixth consecutive quarter of N. R. At about 100 per cent.

The remainder of my comments would refer to non-GAAP measures.

Willing to expenses and profitability of gross margin expanded to 75 per cent in two or three a sequential improvement up roughly 160 basis bargains once again infrastructure optimization economies of scale and operating leverage where the three men drivers of improvement yeah, very pleased with our progress here gross margin improvement is sent.

Close to the Hell of a unit economics, that'd be enjoy and help enable the pace and structure of our growth investments.

R&D expenses was trying to 2.8 million for the quarter, which was up 50% year over year.

Already expenses increased and forward you to the hiring of foods that I've had increased out of sources available to drive product innovation, a new feature rollouts.

Plan to come to new recruiting top engineering talent appropriately stuff for the R&D organization for future product development.

Our sales and marketing spend for the quarter was 36.6 million an increase of 44% compared to two three of last year.

He remained generally on face the double that had gone to far sales team by the end of this year.

We expect to continue investing in sales and marketing efforts in order to come to new driving sustainable customer growth, both domestically and abroad.

Adjusted EBITDA was positive point 8 million slightly better than what we had estimated due to stronger gross margins are slightly more measured pace of hiring from summer seasonality.

According to two four we anticipate challenges in some areas and momentum and others, Let me break break that down for you.

On the momentum side or increase product breath is helping unlock newtown with new customers and unlock spend that wasn't previously addressable essentially said customers who have video library as part of their room. Your enterprise solutions generally are stocking up higher contract values and are more willing to sign multiyear deals vimeo.

Events, which we announced earlier. This week also provides us with more ammunition to win deals, particularly against compensate those with narrower focus.

You also so customer retention hold city across the business restart enterprise logo to attention pick up sequentially. This Walker and if you can tell by the logos, we have shed the nature of customer and the type of deployments. We are winning I'd also evolving very positively.

Finally are you ordered economics, romagne healthy and a hiring plans have not changed and will continue to look for opportunities to invest in getting into market share.

On the challenge besides basketball and so still a reality.

The unprecedented dynamic of 2020 combined with the majority of our offering makes forecasting with precision hag.

You saw softness in R. O P P products, especially in in <unk> and market Board that goes to a fitness and food.

These two were to go to a materially elevate the demand and urgency during the pandemic and the reopening so muted new business demand more than we expected, especially for smaller customers.

Still early in our enterprise journey and White every new launch opens up more opportunities to sell that also takes time to best and optimized having multiple Lewis of growth is a first class problem have you're focused on steadily unlocking them.

These dynamics of made a challenging to forecast the last few quarters with precision. So we are a bathing our view on queue for.

We now expect to for revenue growth to be at or slightly about 25 per cent in two.

Tons of that you know where your percentage comparisons keep in mind, we are lapping very strong growth in the fourth quarter of 2020 or 54%. So on a two year Spag basis, Q4 is expected to grow at 79% and acceleration from 77 per cent in two three.

We will continue to maintain our investment intensity in order to be appropriately prepared for our future growth and scale four.

424, we expect adjust that they did that to be slightly negative.

For the full year of 2021 be expected to post healthy positive free cash flow similar to last year, but we don't expect to be adjusted EBITDA positive for the year.

Actually we look forward to 22, we are in the midst of strategic planning. So it would be premature to provide specificity at this point.

We do expect revenue growth to be muted in the first half of 22 S. B lab, the strong grocery Delaware. It in the first half of 21, and we expect the growth rate the big back up in the second half of the year.

Essentially said 30 per cent growth for 22 is unlikely. However, we believe that we will get to the 30% growth rate in the medium term once we fully lab that will read columns and realize the benefits of our investments and product expansion.

Product expansion pricing and sales acceleration.

Turning it back to Angelina.

Is there Ryan before we go to Q&A and do you want to reiterate the main takeaways from US today first we are uniquely positioned to empower businesses to adopt professional quality video and that Pam is large and growing.

Every employee can use video at work and every business can be video for.

Second grade stuff is happening beneath the surface.

Product expansion customer validation, the right leading indicators.

While our path to 30% growth is delayed we believe we are laying the right foundation to win in the long term.

So we're not leaning off our pace of investment to achieve our vision and internally we are as ambitious as ever.

Alright, let's jump into Q&A Youse, you are head of Investor Relations will be moderating so yeah, let's open it up for the first question. Please.

Thanks to actually as a reminder, please a mute yourself and turn your video on when called upon a limit yourself to one question and one full of at the interest of time.

Our first question comes from Brian Fitzgerald from Bowls Fargo.

Thanks, guys, Andrew I wanted to ask about the recent.

Vince launch, Missouri competition in the space and I think you've noted that.

One of the large video courtesy players is is entered relatively recently just wondering if you could take us through where do you think you differentiated with your products and then in terms of how you expect.

Vince to impact the business do you think it's more of an episode crossover is it more of an on ramp onto the platform. If you could drill down that's great.

Sure. Thanks, Brian Uhm, I'm pumped about vimeo events.

And I'm excited for a couple of reasons first it allows us to expand our town as I mentioned BTB marketers is a group of marketers, we haven't really served historically and the ability within the event that unlocks is the ability for us to allow me to be marketers to host webinars to have the right marketing.

Integrations with Mark Hadow and have spot in male chimp in constant contact and we think that products in and of itself is quite differentiated wish I'll talk about in a second but then of course the other exciting thing is that this vimeo events is really part of our all in one solution and ultimately what that enabled us to do is land more marketers.

Convert more of our free and self serve users into enterprise as well as expand existing enterprise customers, who may be using us in other ways.

And so I think you're gonna see and the way we're thinking about the product is that we'll be able to do that across the board and it's worth noting that we do plan to monetize vimeo events as an add on and we'll have that very natural ability to expand our monetization from there based on the number of a registrants and viewers of those webinars so opens up.

A lot of opportunity for us.

I'm sort of differentiation no question, there's there's players in the market I view that as a sign that the market is very interesting, but again, we're not approaching it at a point solution.

Think about what a marketer an event marketer wants to do they're not just hosting an event they're planning it in advance having a run of show they have a lot of anxiety on the day I have to make sure. It is executed flawlessly in high quality, but then they wanna take that events and they want to turn it into evergreen marketing content that they put on their website they want to be able to.

Archive and keep that content in their video library, and that's really the way we think of it as if <unk>, whereas others in the market are really addressing a point solution, we're really seeing it a part of our all in one offering and I'll just give you. Some some specific examples to try and make that more tangible.

So every event from vimeo events will be automatically transcribed archived organizing a video library that post event at content can be edited embedded on your website. You know other players in the market don't have the ability to have that their players embedded on your on your website or embedded.

An email and so that's a huge part of the capabilities and then when it comes to the actual product event itself and we think we were delivering something that's gonna make webinars beautiful and most of us have an experienced they they sort of webinars. The capability that we think is possible and some of the ways. We're doing that is we're allowed.

Wing marketers to have an unparalleled experience that they can brand so think of it as everything from the email pre event to the actual interface the ability to have graphics and seen switching all of that done really professionally but also done in your browser and you don't have to have a production team to be able to do.

What yourself and we think that's a real differentiator that again, others don't have we've also really thought about the viewer experience everything and Vimeo events is browser based so you don't have to you know your viewers of your audience don't have to download software to be able to watch the event that removes a lot of friction, particularly on mobile so there's a cup.

Full of different areas I would say if you just look at Vimeo events alone that we think is differentiated but then if you expand that to think about the all in one solution, we really see uhm vimeo events as being very effective in the market.

And and that was just lastly, I will just say we do have some good validation from beta customers and just the early attraction that were thing to to kind of back that up.

Just add one thing to that Brian if you remember the English today, we talked about the 70 billion time that we have and how are we will grow into it. We had also laid out about that we can go from Ah twenty-five K R. Boot to 45 K R. <unk>. This is one of the race that'd be would do it. This is really an up so and expand within an enterprise wherever you can increase the article from an enterprise from.

Where we are today to a much higher value in the future. Obviously this will take time, but this is one of the unlocks that'd be huh.

That was very very helpful.

Great. Thank you. Our next question comes from Tom Chunten of Piper.

Hey, good morning, I wanted to ask a question about enterprise revenue grows it looks like it came in and that you know around 60% year over year in in the quarter and.

Our model would suggest very strong customer growth and some you know maybe the slowdown sequentially coming from average spend just curious if you could kind of flesh out that trend in in in you know maybe maybe the driver there and if I could ask one more I'd just be curious how.

<unk> of enterprise products is treaded, maybe in Ah Ah returned to office environment are you seeing anything different in terms of how your your enterprise customers are are engaging with video is is there a different stage in the pandemic. Thank you.

Sure for the first question Hum Enterprise revenue rose, 60% and it is comping against very very high growth rates of Q3 of last year in terms of the average revenue per user we are very.

Making great progress there the average is due obscure a little bit our strategy is to move from customers from south so to enterprise. So in many instances as a customer migrate from a lower priced so severe to an enterprise T or they started at the lower point and then we expand them over a period of time and increase the <unk>. So we are seeing great bra.

Yes, there are 70 per cent of our enterprise customers. This Walker came from south So migrations, which was very positive N D. S. A lot of opportunities to improve the product let go there and on the on the revenue growth in itself, we saw triple digit growth rates anemia in APEC, even though from a smaller but.

But we are seeing great progress around the around the world on groceries on enterprise, Yeah, and I'll I'll just add on the usage of enterprise question certainly your C. C less urgency right to to purchase enterprise contracts. Then you saw at the height of the pandemic and we've talked about that but he he zoom out.

Videos, and and it's not an R and and you know we can see that because one our retention logo retention is really strong.

Mm product usage is really strong as I mentioned, we're seeing more customers actually adopt multiple products in our suite as we actually expand the product and then you know I sure that pipeline number you're in our pipeline of company is greater than a thousand employees up 150% year on year and so when we let me look at sort of a cross.

<unk>, we track this by region, we look for the sort of any signal that would tell us in regions that have opened up faster that there's something here that is going to fundamentally change our our view on demand and when we don't see that [noise]. So anything besides the the short term kind of tweak then and fluctuations in things like urgency I <unk> I would say feel very very confident that.

That anyone who is unlocking video for the first time is very unlikely to stop using it.

Thanks, a lot.

Our next question comes from use of scalding interest.

Great. Thank you and good morning, guys. So maybe just double click in on that last question where Angela.

Your answer can you, maybe just hone in a little bit or assume.

On on kind of the the key issues that you mentioned around maybe the salesmen for it. So clearly you guys who've been hiring pretty aggressively I think isn't and talk to about maybe Dublin shows first by the end of the year.

So it's not as Salesforce issue is in maybe a <unk> issue potentially as these enterprises are just not spending as much or is it the number of logos that you need to.

And just because the economy's reopening maybe there is not as much as sensitive urgency. So maybe just some qualitative color there would be helpful. And then we get the 30% grocery next year is.

It's kind of too high bar, which I think the street honestly already kind of anticipated but.

On the other side is there is there a floor cheater growth in 2022 that you'd want to.

To kind of put out there.

Thank you that got it all started out on the the sort of sales at first that I I I don't think we have an issue I think we have opportunity and you know ultimately the the key here is that five months ago, We launch video library totally different sale totally different fire and decisionmaker much more exciting in terms of its stickiness and ability to be wall to wall.

Then this week, we watch Vimeo Yvette opens up a totally new way to sell and so I think what you're seeing is just natural you you launched the product you Gotta get product market that you have to then figure out the right pitch. The right sales motion and then you have to figure out the right feel cycle you have to figure out how to sell into the different departments go through procurement process.

The fees and as we move up market. Obviously, what we also see is that it's it's a different kind of process and muscle to be able to sell at these large deal values and you know I gave that example of the fortune 500 retailer that is the biggest venue enterprise deal ever we are seeing a pipeline that can allow us to do more and more that that's exactly what we want.

<unk>, but it certainly takes time and so I don't see any issues icy opportunities I do think we are delayed in our ability to have that just translate on day. One post launch too you know to to the numbers you all can see but but but that's my view and I think the way to marry that with that.

The sort of numbers that we've shared with that you also have a bit of a tale of two cities within the business, where you have areas like O G. T where that are more challenge cause I'm tough comps doesn't take away, though from that momentum on Vimeo enterprise.

Put a little bit more specificity what until he just said.

It's really two parts. The first one is expansion enough cell and on this one we think of it as a delay essentially just mentioned we have introduced multiple new products. We are still refining our how are we suppose to nudist doesn't make us new buyers within large enterprises and we are continuing to two we can make progress daily.

Behind by a couple of a couple of quarters, but it is more of a delay than anything else. The other part is new bookings honest, maybe about a little too optimistic of how the second half will turn out based on the signals from the first half of this year, there was pronounced seasonality and two three which obscured some of the signals as well the challenges that we have here is.

The OTT faith in fitness verticals and the demand signals have been lighter here, we have made a big store product both on the O D decided as the last give me a premium side and we are seeing some early signals, but if you step back and look at where the creator economy and like screaming.

Markets are is a large market very underpenetrated and we have a huge opportunity here.

Great. Thank you. The next question I'm, sorry, excuse of did you. So this is gonna say and last four of <unk>.

[laughter].

Yeah listen we are still in the middle of our planning process product plants are being that I love to go to market plants are being built a financial plan will follow after that so it'll be premature for me to give you a more clear guidance here, but I can give you a broad structural how to think about next year. If you think about where you are and how we are exiting for any 24 of 2021.

The first half of 22, the growth rates will be muted because we will be camping against really high growth rates, all that'd be Delaware in the first half of this year, we do expect the revenue growth rate three accelerate in the second half, but it's hard for me to predict what the what the shape of the car, Oregon that bottom.

It would be but that's one way to think about it. After you have more clarity we will share that with you in the next one in school.

Sooner. Thank you both thank you very much.

Thanks next question from <unk> from Jeffries.

Good morning, just as it relates to the Guy down I'm curious everyone's asking if you had a split between enterprise and the S. M B a.

Wait how would you wait those two factors is enterprise a bigger factor and this guy down there are a number of questions from your investors around what what's causing especially after you. Just gave gave gave 30 plus percent God.

Yeah, Uhm, specifically on queue for rent as we talked about the two areas, we saw challenges where one on the expansion and Upsells and the second one on new business on the expansion on Upsells that there's more enterprise and the on the new business. It is split between South services.

Premiums too and the OTT business in the Grand scheme of things, we're talking about a couple of percentage points change it right. It's not a it's not a massive change for Q4, but if you want to think about how to break that apart. That's the way I would think about it.

And in the fall, it's just that the Mark Martin He's a big gross margins have been really good what what's driving that then I'll take.

Yeah. Good question <unk> multiple things one enterprise revenue as it makes the total revenue continuing to increase and gross margins are better on enterprise products. So that's one of the drivers. The second thing is our big kudos to our engineering and procurement teams for driving the cost of hosting in Delaware and.

Network costs down so that's one that's also contributing to it the third thing is economies of scale as a size increases where you get better pricing from our from our partners and that's also driving the girls Martin I wouldn't expect the level of gross margins to continue to increase it to scale. We added five percentage points in the last book waters I D.

Definitely wouldn't expect that for the future of four quarters.

Great next question from Justin Patterson from Quebec.

Great. Thank you very much good morning building on that gross margin comment neuron would love to hear about just how we think about the degree of efficient CGC going forward and how that could look and future quarters, when perhaps bigger picture back with the the sales team I know in the past you had commented about some.

Sales cycles being pushed out what's the latest you've seen there and I guess as we get towards more longer term contracts would it make sense to just talk about this more on our bookings basis, and so I'm guessing you've got that the first side building up nicely as the enterprise ramps up. Thank you Yeah, let me start with the sales cycles. So.

<unk> sales cycles, what a little longer this at two three compared to two three of last year. If you. If you remember to three of last year. The demand patterns were very different the urgency was much higher than very close today.

The last quarter. It had increased by a couple of a few days, we are still talking sales cycle. So four to five feet. So in the Grand scheme of things that there's still much more efficient than it larger enterprise sales cycles that you would see that are two things that drove Q3 sales cycles Ah Ah Ah by a couple of days. The first one is seasonality last year, we didn't see.

A lot of seasonality, but this what are we did see pronounced seasonality, especially anemia. So dad drove some of that increase so if you compare against historic ears, and Q3 is always the sales cycles are always a little longer than two or three so adjusting for that this is very much in line with what we would have expected second thing, which is actually very exciting.

And Ah promising is that we are seeing more and more large deals in our pipeline until they talked about how the large deals customers with more than thousand employees of 150 per cent increase in the number of deals in the pipeline and actually pursue and land. These large deals we do expect sales cycles, you'll get longer that's a natural and positive evolution of our business.

Model. Great example is the retailer that until you've talked about it's a large deal a six figure deal multiyear deal and the sales cycles were a little longer but those are the kinds of deals that we want and it shows that our strategy is actually working.

Back to your gross margin question, sorry, we do expect gross margins to continue to improve but at a much lower based on what we have seen in the last four quarters.

Great next question, John like Lidstrom cone.

Great. Thanks, and sorry, if this was already asked him just on the sales and marketing a head count could you just discuss the number of heads that you've added thus far. This year has you know kind of is that gonna be is that a change from your initial expectations and then any kind of.

Initial color on sales and marketing headcount ramp in 2022, and then on the product side with the recent launch of library and live events. You can you kind of frame how important these new services are for both customer acquisition in silver tension and then should we expect any other big product launches before the end of the year.

I can take the first one on products Don.

As I said in sort of the commentary, we do expect to maintain our pace of innovation through the end of this year and into 20th 22 and the reason is that we are so early and how professional quality video can be used that when we think about all the different things that we can build and that our customers are looking for [noise], we've got a lot of inner.

Nation ahead, and the team is has I think delivered really well this year and we're confident that we're going to continue to be able to deliver I think last earnings I had said we were a little behind in R&D hiring we actually are now hitting our targets for R&D hiring I'm in this market and so between being able to add the right resources and sort of the the muscle that we have there.

[noise] certainly you should continue to see a good pace of innovation in terms of how to think about things like video library, and vimeo events as as big drivers of our abilities either land or expand.

It's interesting what we're seeing is that each of these sort of solutions on both a standalone basis, and then as part of the all in one solution open up levers for both I'll give you. An example, when we launched video library.

<unk> thesis was that it would be a great retention and expansion lover that you know we were landing customers with live events and then that video library would be the sort of sticky thing with which we would expand and that's very much what we're seeing but we're also seeing that we're winning deal just for video library for the first time and so I think it's really just.

Moving in multiple directions, and in our ability to both land and expanded with each of these and that's I think ultimately a good thing and speaks to the ubiquity of video and I think speaks to why a solution that you build has to be so sort of broad and ubiquitous in terms of its capabilities. So that any employee any team in any department can you.

You said.

Yeah, and specifically on your question about sales head count our plan actually started the ear, what's the double ourselves set down from wherever you are actually ended last year, we have roughly in line to do that I think we should be in a good place to close out the year with every thought it would be 420 22 little too early to say the exact numbers, but we are planning to.

Invest in our sales and marketing as we talked about our international footprint is still very very light. We continued to grow our that'd be Atlanta flags in multiple geographies and will continue to invest in those geographies for 22 exact numbers D V D. At this point.

Thank you. Thank you next question from Dan Simon from BMO.

[noise], Thanks morning Uhm.

So I have two questions first uhm could we just returned to the comments about transitioning the pricing model from storage to proceed and just unpack that a little bit more of the details of it and the timeline for it and then second.

We do help us out with your monthly reporting and that will be updated guidance.

It looks like there's still a fair amount of volatility month to month, which sounds in line with what your comments are hoping that you can shed some light on us in the short term how much of that is expected from the changes in the pricing model versus maybe some of the points of softness that you mentioned like C. O T T.

Business or the fitness industry.

Okay.

So I I'm pricing I would say, it's it's it's a pretty massive project for us and what where we've begun to do is is is sort of start to make some of those changes, but you'll see us we're all that out over the next few quarters.

And we're gonna have the task and kind of validate as we roll it out but the the fundamentals here are today on our our self serve base, we really price based on storage you're gonna see US now move to proceed and that coupled with a bunch of products.

Changes and improvements, where we are now offering more value for free users things like our screen recording tool and then more team collaboration capabilities and.

And so it's not just really pricing, it's it's really pricing packaging cheering and product all happenings together and.

And we will roll that out I think steadily and we'll look for fast pads validation, but will also be careful to do it do it well as I said this is a longterm cross leather for us and we have to do that properly on the enterprise side, we are going to start beta testing the new pricing that's quarter Uhm, and then look to roll it out in the next few quarters as well and.

They're really what you're seeing is we're going for more of a platform fee type of model to having sort of different pricing and expansion levers based on the use case and that's designed to be aligned with our customer success. So to get to give you. An example of what I mean by that if it's an external marketing use case like web.

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Well that and the success of the customer is based on things like the number of viewers are registrants that webinar that tie directly to their R. O Y and so that's where we'll start will look to to increase our pricing, but if it's an internal communication use case like using video library, there, you'll see us look to price based on things like add.

Admin and contributor seats, and so really what we're doing with the price change is not only moving from storage to seat, but we're also really creating the right willingness to pay it kind of mapping for each of the different use cases and departments that we offer and we believe that over time that is going to allow.

To sort of monetize better than we have in the past. So if we want to kind of take our time to get that right.

And specifically on the monthly metrics, Dan we have heard the feedback from multiple investors. That's rather this is helpful or not Ah we are evaluating that ourselves. We believe the quarterly cycle is the best way to think about re meals business and revenue growth because that is the natural rhythm of things how we operate doesn't end up.

Fries as company. If you remember you started publishing monthly metrics early mid mid last year and the.

Tend to give more of his ability to the investors on how things were progressing in the middle of Covid. The situation has changed we are actively looking at what should be the better way to communicate with all of you you plan to come to new the monthly metrics through this year, but we will review the plan for next year and share that with you whenever you're ready.

Great. Thank you I'm seeing new further questions in queue with that I will I think we'll wrap it up thank you everyone alright.

Thank you awesome. Thank you to everyone for your time today.

On the invested outreach side this quarter, we will be presenting the wells Fargo GMT conference on November 30th at the B M. A growth in ESG conference in December 7th Vimeo will also be hosting one on one meetings in December at the Barclays Conference. We look forward to speaking with many of you very soon and I. Appreciate your continued support it to me.

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