Q2 2025 Vimeo Inc Earnings Call

Or the bigger screen.

Inspiration, you're looking for.

It's on Vimeo.

Hello. And thank you for joining Vimeo. Q2 2025 earnings live Q&A. Before we begin a few comments. First, this session will be recorded and available on the Vimeo. Investor relations site later today.

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

Please refer to the earnings release we furnished to the SEC on Form 8-K earlier today, which is posted on our website for additional information regarding those risks and uncertainties.

We've also provided information regarding certain key metrics and our non-gaap financial measures, including certain forward-looking measures. These should be considered in addition to and not as a substitute for or and isolation from gaap measures additional information regarding Vimeo financial performance, including reconciliations with comparable. Gaap measures can be found in our shareholder letter and Vimeo filings with the SEC as well. As in supplemental information posted on the investor relations section of our website. And with that

That I'll hand it over to our CEO, Philip Moyer. Philip.

Good afternoon.

Thank you for joining Vimeo, Q2, 2025 live earnings call.

Vivo had a strong Q2 2025, with bookings growing 6% year-over-year, the strongest growth since 2022.

Self-serve grew bookings by an impressive 11% reaching levels. Last seen in 2021

This success is attributed to the recent changes in packaging and pricing.

But also early positive signals from all the new product improvements we've been making.

Vimeo Enterprise grew Revenue by 25% and saw its second highest booking level on a dollar basis. Despite falling slightly short of our bookings growth goals. The fundamentals are strong, and we are winning competitive deals by helping Major Brands, consolidate their video technology, and seeing traction across all of our AI offerings. We Believe will be, we will re-accelerate growth in this products, bookings.

In the second half, our business is doing well. We continue to hope to end the year with a line of sight to double digit growth.

Moreover, our improved efficiency has enabled us to raise our 2025 adjusted ibida guidance to approximately 35 million dollars up from our previous range of 25 million to 30 million.

Thank you again. And with that, we will take your questions.

First, we're going to go ahead and remind all of our analysts to please turn on your cameras and your audio.

First, we'll talk to Yousef, squally.

Excellent. Hi guys. Um let's see. New maybe. Um Philip can you talk a little bit about

The uh, the self-serve piece of the business. Um, the uh seems like the upside came mostly through the, the pricing changes that you discussed, maybe talk about.

The underlying, um, elements of what's driving subscriber growth in the client still. And when you talk about having a line of sight to double-digit growth, uh, by the end of the year,

um,

What's what's kind of big 10 in terms of subscriber growth for the self-serve business? In particular, do we get to a point where maybe we, you know, uh,

Flattened the growth or is that something most likely for 2026?

Look, I am super thrilled with our, uh, the self-serve leadership that we have. I think earlier this year, I talked about the fact that we put in place a single threaded leader and that single threaded leader, and that team are really doing some tremendous work.

As it relates to watch, and it relates to that entire Creator Community is absolutely essential. Um in the business, simple things like re-releasing, the Apple, the Apple application that we did this past quarter, our again, starting to Delight our customers even more. We just started rolling out. AI features. Um, I think I mentioned this in the last call, we had just started that with our self-service customer base. And so, we're seeing really strong activity, um, in the use of our AI features. And so, when I combine together all the innovations that we're doing the solid retention, satisfying, customers war with the right pricing and the right packaging. I actually do continue to believe that that that business can be a growth business um over a longer period of time than just from the enhancements that we're seeing in the pricing and packaging.

Why don't I add to that a little bit? So you asked a little bit about the subscriber growth.

26, but as we talked about before pricing gives us a lot of room in that business. If we look at the next uh, several quarters. In fact, actually in Q3, we are already seeing really nice Trends in the self-serve business and 1 of the things we've talked to a lot of you about is as we try to get back to growth and move the company back, solidly into Revenue growth that 1 of the fastest passed back to that is through Self Serve right now. As we look at it, we've always just thought let's get self served back to growth, right? Let's start there. But actually given what we're seeing, we believe that with with good execution, this could be a double digit grower. So, when you think about the math to get

Vimeo itself back. Um, that is really exciting to us. Of course, there's lots of execution to do, but the self-serve business is really, really— we’re very enthusiastic there in terms of the business.

Thank you. And then just very quickly on the Enterprise and the slowdown in bookings. I think it was related. You said in the release to 8, particular customer Community. Just drill a little deeper into that and what gives you confidence for the re acceleration uh, in the second half? Yeah. So let me start and then, um, Phil can fill in some more about kind of where we're going with the product road map. So the customer we mentioned is kind of an interesting example for us and and very much speaks to the strategy at Vimeo right now. So that customer happens to be an international customer that was very Central bandwidth, a bandwidth user in a lot of ways, they were head of Vimeo Enterprise account, but a lot of what they were buying us for was bandwidth and as you can see in our add-ons business, that bandwidth business has been gotten a little bit more commoditized. You've seen that business, come down in the last, um,

A while for us. So this customer really never adopted our other features as well as we would have hoped. And when that happens we have retention uh challenges. And we we know that and we are working on that and that is why we are so focused on our product roadmap that includes more than that. So for us internally I think it's a good lesson to remind us that we have to continually work to get our customers up and running on our other features. Um, this 1 obviously is unfortunate but I think for us it's a really good reminder of what? We're

Going. It also, you know, in our our mind makes us very excited about the product roadmap ahead. Um I think I'll focus in on some of the things we're bringing for Enterprises that we just think are going to help avoid that kind of a situation going forward.

Yeah, I would say a couple things. Um you know when you're growing a hundred million dollar Enterprise businesses, you push through that hundred million dollars. It is always a little bit of it. It can be a bit Rocky in, making sure that you have all um all engines firing on all cylinders. Um, there's 3 things that I think about when you really want to scale 100 million dollar Enterprise business, you've got to do a fantastic job with new and winning against your competitors. You do that by innovating first and foremost and really providing better service um, and a better product than your competitors. This quarter, I talked about the fact that we're very happy with the number of competitive wins that we have, we're seeing even more customers start to consolidate their video platforms into us. And so, we're being very aggressive in the market. Very, very aggressive, um, in going after, um, competitive deals and we're excited about how we're winning those deals. And we believe that we're making a, a lot of customers that will be with us, a long term, long term.

Long time, the second thing we've got to do is retain customers and so we're spending a lot of time in retooling, some of our customer service department. Um, and how we support customers in doing a better job to be able to identify customers like this larger 1, that might have a retention risk and proactively go and approach them with different offerings. The third thing that we've got to do a really good job of is expanding that customer those customer relationships.

Start rolling out some of the most important releases that we ever have in the Enterprise business. We have some new technology, that's hitting the marketplace here in Q3, and in the Q4 called workspaces. It's the number 1 thing that's been requested by customers. It's higher grade security down at the departmental level at the organizational unit level. The AI work that we're doing in translations we're seeing. Now we're finally starting to generate revenue from the AI innovations that we did and the translations work where we're seeing customers come in and translate, literally their entire libraries. Um, uh, in using our AI features, and so, I'm excited about the business. Um, I'm excited about some of the customers that we've won. These are some of the most technologically advanced companies in the world Spotify, as an example and jaguar Land Rover, FanDuel some of the biggest names that have really extraordinarily software development organizations and Enterprise class technology and they continue to choose Vimeo. So I continued to be very, very excited about the Enterprise business. I believe it can continue to be a, a solid growth engine for us regardless of just a few minor UPS or Downs.

Inside of a quarter.

All right, great. Thank you, both.

Thank you, Yousef. And now we'll go to Tom Champion from Piper Sandler.

Graded uh both Jillian. Good afternoon. Um, Philip, I guess maybe on.

Enterprise with the

leadership changes you made at the start of the year and everything you see on the product side. Maybe not to put, um, 2 pointed a question out there. But we, we did see an Enterprise customer decline sequentially. Just just curious your thought on, on the ability to, to get that back to growth in in the second half of the year. And I'm curious as you think about Enterprise over the last quarter, was there any impact from macroeconomic turmoil that, you know, maybe was in place at the start of 2q and or, um, just any thoughts on if um, changes to the search landscape? Are impacting the the Enterprise side of the business? I don't, I don't know if it does or it doesn't, but but search is clearly, um, in a period of change. So any, any comments around those positions would be really helpful. Sure. So, you know, first of all, what I would say is that we continue to win new customers. Um, and we're excited about the fact that that we're bringing more

Customers, um, into Vimeo, um, you know, uh, every single day we do have a number of customers that churn. Um, you know, this is a business that I would tell you that, uh, when I got here, the aov in that business, was much lower than where it is today. And so how we classify customers whether or not, they're, you know, um, a new, a Vimeo Enterprise customer self-served, customer a custom customer an add-on customer, we're still getting some packaging and pricing. Um, right in that space. Uh, we're launching some new skus in the mid-market. Um and it's uh increasingly what we're doing is we're trying to provide a perfect stair step up from self-service, all the way up to Enterprise. I think I've said in the past that roughly about 70% of our customers, in the Enterprise business come out of that self-serve business. And so in any given quarter, um, it's been interesting to me to see that we sometimes change customers back and forth between those businesses. But overall, um, I'm I'm in pretty pleased with our ability to bring new customers um, into the business. So still excited about it. I would say on the macroeconomic trends. Um, you know, we've seen a few

Uh, challenges, um, in some geographies, um, you know, from tariffs and some uncertainty. Um, we've seen a little bit of uncertainty in some areas, uh, Healthcare as an example, and education that maybe are not as strong as as what we'd like to see. Um, but I would also tell you that we've got a stronger value proposition than ever in some of those places. Our ability to be able to do interactive video. We think is going to be important in our ability to be able to do HEPA and compliant video. Um with um you know with the healthcare organizations, we continue to have a strong value proposition

Um, and then your last question as it relates to search, um, look, we've seen a lot of organizations fall off a cliff. Um, you know, in terms of SEO, I've seen some numbers as high as like, 30 to 40% drop off. Our team is doing a better job than they ever have in doing, um, return on ad spend. We focused really, really, really tight on that. And I think that we're probably more efficient than we've ever been in that space. Um, we also think what I'm excited about is with some of the work we're doing with agentic AI. We actually have the ability to be able to help customers with SEO and search and really make video part of that that longer term um SEO strategies. So um, while there are some challenges in the in the environment in that space, we also view what we're releasing in the marketplace is something that might be a solution.

okay, may may may maybe if I could just ask 1 more

Jillian, I'd love to have. You talked a little bit about the investment plans for the year? I think last quarter, it was up to

Investment plans for the year. Absolutely. So, I think what we're finding is that we're able to invest more efficiently than we expected. So, when you look at our guidance, overall the Top Line guidance is roughly the same as where we were before, but we've been able to bring up the adjusted Eva guidance. And that really is because we're able to get more done with less. Um, I think it it is not and at all an indication of any um, less, uh, enthusiastic approach to investing. But as we go and deploy the money, I think we're being very, very, um, careful about is every dollar or something. We want to spend and we've been adjusting along the way, so we're delighted that we can have that kind of an ibida result. Um, even while we invest what I think, it really speaks to is something we've talked about for a long time, which is the Vimeo business model is great. This business really can generate very attractive margins um even when we're in a lower growth environment, so as as we build this business we we have always had the

Approach of let's invest. Very, very carefully with our shareholders money and you're seeing us be able to put up better ibida margins, which has actually been a trend we've seen over the last 2 years as well.

I want to add 1 thing. Um, in addition, I think we're super proud of how efficient we've been in this space. Um, the other thing is that we are taking a business that has had, you know, close to a dozen different products and we're bringing that that entire business down and that code base down to a single code base over a period of time.

The as we deprecate older products, as we converge these products together, we get more efficient and we get faster. And so, our pace of innovation, I talk a lot about this in our shareholder letters about pace of innovation. It is so, so important to customers right now in a world where AI is changing the interface to information that we're able to keep pace and actually, outpace our competitors in taking customers. And the entire video platform, we have into this next era of AI. And so I'm excited both about our efficiency but also our speed which we're innovating.

Thank you. And our last question Bill Kerr, from TD Cowen.

Hi, thanks for the question. Um, so you mentioned on the shareholder video that you're testing, um, agentic AI features with customers now. Um, I was hoping that you might be able to describe uh, you know, what, some of those features look like and what the potential timeline might look like for a broader role out of those features that you're testing now. You know, I've recently seen some statistics that state that over 64% of companies in the world are rolling out, AI agents. Um, and we intend to make Vimeo a part of that AI agent ecosystem.

Um, the ability to be able to use any AI agent that you want and be able to query the Vimeo. The Vimeo library to be able to ask questions. You know, is, can you find a video that has my old logo? Um, what is the most frequently watched video inside of my inside of my video library? And how long do people watch it? Um, is there a particular color? Um, pallet that's being used inside of this video, or being able to allow the customer support department to be able to integrate video directly into that customer support experience. Say, for example, you have a complex product, instead of you having to just put out, text to be able to guide the user, you can go right to a section of a video. The idea of a magentic video is literally making Vimeo like almost like, chat GPT for Vimeo, um, being able to provide, um, access to the entire Library. Um, through a simple agent, a simple natural language interface. Um, and we're really excited, we see huge uses for this and things like healthcare to be able to augment the the patient experience, we see the opportunity to bring down.

Customer support costs by being able if a pitcher is worth a thousand words. You know, a video is worth a million words and the ability to be able to deliver that video right at the right moment. Um, to in a customer support situation is excited, the ability to be able to onboard employees. Um, you know, 1 of the biggest contributors to our video library is zoom. We have an integration with zoom and so you can imagine Zoom meetings and team meetings and meets suddenly being able to be summarized, the content and be able to give Clips to be able to onboard a brand new employee of. These are the most important clips that you need to watch about.

About the project that you're coming into. And so we're really excited about this ability to be able to extract details to be able to interact with video and to be able to summarize vast amount of content that you simply couldn't do without having to watch all the videos in your library. We can do it in a fraction of a second with some of the new agentic technologies that we're releasing.

Okay.

At sort of the 3 legs of the capital, allocation stool, invest in the business, buy back shares and m&a. Um, and you know as you we really came into this year, very focused on the invest in the business angle on that. And so that's what we've been really focused on at least near-term. Um but we believe that we are a very attractive. Acquirer we are stable, we have a great business model, we're in a really exciting space and so we do look at a lot out there. I think our bar to have something be something that we want to devote the team's energy to and distract from other things we're doing is pretty high. So so far nothing's passed that test if you will, and then you've seen US buy back shares, um, over time, and we clearly have an appetite for our shares, um, out there as we work through the years.

Okay, very helpful. Thank you for the questions.

And that's all for our questions with that. I'll turn it back over to our CEO, Philip Moyer.

So, first of all, I want to thank all of you for being shareholders, and thank you for joining our Q2 2025 earnings call. We look forward to speaking with you for our Q3 update in November.