Financial Performance Overview

Vimeo is the world’s leading all-in-one video software solution. Vimeo saw a 1% increase in revenue to $104.9 million in Q1 2024, compared to $103.6 million in Q1 2023. This was driven by a 60% increase in Vimeo Enterprise revenue to $18.5 million, partially offset by declines in Self-Serve & Add-Ons revenue and Other revenue.

Vimeo reported net income of $6.1 million in Q1 2024, compared to a net loss of $0.7 million in Q1 2023. This improvement was primarily due to higher gross profit and lower operating expenses.

Some key highlights:

• Gross margin improved to 78% from 77%
• Operating expenses decreased by 5% or $3.8 million
• Adjusted EBITDA increased 176% to $12.2 million

Revenue

Total revenue increased by 1% in Q1 2024.

• Vimeo Enterprise revenue grew 60% to $18.5 million, driven by 48% subscriber growth and a 7% increase in Average Revenue Per User (ARPU). This demonstrates strong traction in Vimeo’s enterprise offerings.

• Self-Serve & Add-Ons revenue decreased 2% to $69.9 million, as a 9% decline in subscribers was partially offset by 6% ARPU growth.

• Other revenue fell 19% to $16.5 million, largely due to Vimeo actively deprecating products in this category.

Table 1: Revenue by Segment

Segment	Q1 2024	Q1 2023	Change	% Change
Self-Serve & Add-Ons	$69.9M	$71.6M	$(1.7)M	(2%)
Vimeo Enterprise	$18.5M	$11.6M	$6.9M	60%
Other	$16.5M	$20.4M	$(3.9)M	(19%)
Total	$104.9M	$103.6M	$1.3M	1%

Expenses

Total operating expenses decreased by 5% or $3.8 million in Q1 2024. This was driven by reductions in advertising costs, restructuring charges, stock-based compensation, and other areas.

Research & development and general & administrative expenses increased due to higher stock-based compensation from recent executive turnover.

Sales & marketing expense fell 19%, mainly due to a $7 million decrease in advertising spend as Vimeo shifts toward more organic customer acquisition.

Table 2: Operating Expenses

Expense	Q1 2024	Q1 2023	Change	% Change
Research & Development	$28.1M	$31.3M	$(3.1)M	(10%)
Sales & Marketing	$32.3M	$40.0M	$(7.7)M	(19%)
General & Admin	$18.0M	$9.3M	$8.7M	94%
Total	$78.9M	$82.7M	$(3.8)M	(5%)

Profitability

The reduced operating expenses combined with slightly higher revenue led to a $5.4 million increase in operating income to $2.6 million.

Vimeo also reported net income of $6.1 million in Q1 2024, versus a net loss of $0.7 million in Q1 2023.

Adjusted EBITDA increased 176% to $12.2 million, representing a 12% margin versus 3% in the prior year period. This significant improvement in profitability reflects Vimeo’s path toward self-funding growth.

Cash Flow & Balance Sheet

Vimeo maintained a strong balance sheet, ending Q1 2024 with $304 million of cash and no debt.

Cash from operations improved to $5.6 million of inflows versus $1.2 million of outflows in Q1 2023. This was aided by reduced losses and favorable working capital trends.

Vimeo believes it has adequate liquidity and resources to fund operations and growth initiatives for the foreseeable future.

Outlook

Vimeo is showing strong momentum with 60% enterprise revenue growth and much improved profitability and cash flow compared to the prior year.

Key focus areas going forward include:

• Continuing to drive enterprise adoption
  
• Managing the decline in legacy revenue streams
• Sustaining recent expense discipline
  
• Funding growth through operating cash flows

If Vimeo can maintain positive operating leverage and cash flow generation, it will be well positioned for durable growth in the years ahead. Profitability may still fluctuate from quarter to quarter, but the overall trajectory is encouraging.