Vimeo (VMEO) Q2 2025 Earnings Call Transcript

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DATE

Monday, Aug. 4, 2025, at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Philip Moyer

• Chief Financial Officer — Gillian Munson

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TAKEAWAYS

• Total bookings growth: Bookings increased 6% year over year, the highest rate since 2022.

• Self-serve bookings: Self-serve segment bookings grew 11%, reaching levels last seen in 2021, driven by new pricing and packaging initiatives.

• Enterprise revenue: Enterprise revenue rose 25%, and the segment achieved its second-highest booking level on a dollar basis.

• Adjusted EBITDA guidance: Management raised 2025 adjusted EBITDA (non-GAAP) guidance to approximately $35 million, up from the previous $25 million-$30 million range, citing improved operational efficiency.

• AI product monetization: Early adoption and monetization of AI-driven translation features are generating new revenue streams.

• Product roadmap: The company is rolling out “Workspaces” for enhanced departmental and organizational security, the most requested enterprise feature.

• Enterprise client wins: New enterprise customers include Spotify, Jaguar Land Rover, and FanDuel, reflecting ongoing traction in competitive markets.

• Cost efficiency: Streamlining product code bases and selective investment enabled the company to maintain top-line targets while raising profitability projections.

SUMMARY

Vimeo (NASDAQ:VMEO) management disclosed that self-serve subscriber numbers continue to decline, but retention rates remain strong due to recent pricing and packaging changes. Product consolidation and selective R&D investments have contributed to improved adjusted EBITDA guidance and margin leverage without reducing topline growth expectations.

• Executives stated there is “line of sight” to returning company growth to double-digit levels, contingent on continued execution in self-serve and enterprise segments.

• CEO Moyer said, “We’re about to start rolling out some of the most important releases that we ever have in the enterprise business,” referencing the planned launches of Workspaces and advanced AI capabilities in the second half of the year.

• CFO Munson confirmed capital allocation priorities remain focused on reinvestment in core business operations and ongoing willingness to repurchase shares as warranted by market conditions.

• Moyer described Agentic AI as enabling users to query and interact with video libraries through natural language, positioning the platform as a solution for evolving customer needs in search, support, and content management.

INDUSTRY GLOSSARY

• Agentic AI: Platform features enabling AI-powered agents to autonomously interact with, search, and summarize video libraries based on natural language queries.

• Workspaces: A security and permissions feature designed for departmental and organizational unit segmentation within the enterprise offering.

Full Conference Call Transcript

Philip Moyer: Thank you for joining Vimeo’s Q2 2025 live earnings call. Vimeo 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 attributed to the recent changes in packaging and pricing. But also early positive signals from all the new product improvements that 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 we will reaccelerate growth in this product’s 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 EBITDA guidance to approximately $35 million, up from our previous range of $25 million to $30 million. Thank you again. And with that, we will take your questions.

Gillian Munson: Hi. First, we’re gonna go ahead and remind all of our analysts to please turn on your cameras and your audio. First, we’ll talk to Youssef Squali.

Youssef Squali: Excellent. Hi, guys. Nice seeing you. Maybe

Youssef Squali: Philip, can you talk a little bit about the self-serve piece of the business? It seems like the upside came mostly through the pricing change that you discussed. Maybe talk about the underlying elements of what’s driving subscriber declines still. And when you talk about having line of sight to double-digit growth, by the end of the year, what’s kind of baked in terms of subscriber growth for the self-serve business in particular? Do we get to a point where maybe we flatten the growth, or is that something most likely for 2026?

Philip Moyer: I am super thrilled with the self-serve leadership that we have. 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. The pricing and packaging work was important, and not just from an increasing of price perspective, but also from customer retention. And so the retention rates in that business continue to be strong, even as we roll out new pricing and packaging across the entire customer base. So first and foremost, retention is absolutely essential to establishing a floor in that business to be able to grow from.

The second thing is that we’ve been releasing a lot of really important features, capabilities that some of our customers have been asking for years. Of the things that you saw on the lead-in video, the way that we actually the watch page for videos. People come to Vimeo for inspiration a lot of marketers do. A lot of creators do. And so reinvigorating our brand as it relates to Watch and it relates to that entire creator community is absolutely essential. In the business. Simple things like re-releasing the Apple application that we did this past quarter are again starting to delight our customers even more. We just started rolling out AI features.

I think I had mentioned this on the call. We had just started that with our self-service customer base. And so we’re seeing really strong activity 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 more with the right pricing and the right packaging, I actually do continue to believe that business can be a growth business, over a longer period of time. Than just from the enhancements that we’re seeing in the pricing and packaging.

Gillian Munson: And Youssef, why don’t I add to that a little bit? So you asked a little bit about the subscriber growth. I think likely mathematically that is into 2026. But as we talked about before, pricing gives us a lot of room in that business if we look at the next several quarters. In fact, actually, in Q3, we are already seeing really nice trends in the self-serve business. And one 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 one of the fastest paths back to that is through self-serve.

Right now, as we look at it, we’ve always just thought, let’s get self-serve back to growth. Right? Let’s start there. But actually, given what we’re seeing, we believe that with good execution, this could be a double-digit grower. When you think about the math to get Vimeo itself back, that is really exciting to us. Of course, lots of execution to do, but the self-serve business is really, really we’re really very enthusiastic there. In terms of the business.

Youssef Squali: 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 a particular customer community just drill a little deeper into that and what gives you confidence for the reacceleration in the second half.

Gillian Munson: So let me start and then, Philip can fill in some more about kinda where we’re going with the product roadmap. So the customer we mentioned is, kind of an interesting example for us. And very much speaks to the strategy of 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 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 challenges. And we know that. And we are working on that. And that is why we are so focused on a 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. This one obviously is unfortunate, but I think for us, it’s a really good reminder of where we’re going. It also, you know, in our mind makes us very excited about the product roadmap ahead.

I think I’ll have focus in on some of the things we’re bringing for enterprises that we just think are gonna help avoid that kind of a situation going forward.

Philip Moyer: Yeah. I would say a couple things. You know, when you’re growing a $100 million enterprise as you push through that $100 million, it is always a little bit of it can be a bit rocky in making sure that you have all, all engines firing on all cylinders. There’s three things that I think about when you really wanna scale a $100 million enterprise business. You’ve gotta do a fantastic job with new. And winning against your competitors. You do that by innovating. First and foremost, and really providing better service 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 in going after competitive deals. And we’re excited about how we’re winning those deals. And we believe that we’re making a lot of that will be with us a long term long time. The second thing we’ve gotta do is retain customers. And so we’re spending a lot of time in retooling some of our customer service department, and how we support customers in doing a better job to be able to identify customers like this larger one that might have a retention risk and proactively go and approach them with different offerings.

The third thing that we’ve gotta do a really good job of is expanding that custom those customer relationships. You know, we made a lot of changes the start to invest in customer relationships this past year and in the past six months. We’ve brought in a lot of new leadership that focuses on expansion, And so the things that I see inside of this business and I spend a lot of time talking to customers, is we’ve got customers that are excited about our products, we’re winning with the innovations that we’re bringing to markets, and we see a path to expand customers.

We’re about to 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 into Q4 called Workspaces. It’s the number one thing that’s been requested by customers. It’s higher grade security down at the departmental level and at the organizational unit level. The AI work that we’re doing in translations, we’re seeing now finally starting to generate revenue from the AI innovations that we did and the translations work. We’re seeing customers come in and translate literally their entire libraries. Using our AI features. And so I’m excited about the business.

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 continue to be very, very excited about the enterprise business, I believe it can continue to be a solid growth engine for us regardless of just a few minor ups or downs inside of a quarter.

Operator: Okay.

Youssef Squali: Alright. Great. Thank you both.

Gillian Munson: Thank you, Youssef. And now we’ll go to Tom Champion from Piper Sandler.

Operator: Great.

Tom Champion: Philip, Gillian, good afternoon. Philip, I guess maybe on enterprise with the leadership changes you made at the start of the year and or you see on the product side. Not to put two pointed a question out there, but we did see an enterprise customer decline sequentially. Just curious your thought on the ability to get that back to growth 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 maybe was in place at the start of 2Q? And or just any thoughts on if changes to the search landscape are impacting the enterprise side of the business.

I don’t know if it does or it doesn’t, but search is clearly, in a period of change. So any comments around those issues would be really helpful.

Philip Moyer: Sure. So, you know, first of all, what I would say is that we continue to win new customers. And we’re excited about the fact that we’re bringing more customers into Vimeo, you know, every single day. We do have a number of customers that churn. This is a business that I would tell you that 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 a Vimeo enterprise customer, self-serve customer, a custom customer, an add-on customer. We’re still getting some packaging and pricing right in that space. We’re launching some new SKUs in the mid-market.

And 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, it’s been interesting to me to see that we sometimes change customers back and forth between those businesses. But overall, I’ve been pretty with our ability to bring new customers, into the business. So still excited about it. I would say on the macroeconomic trends, you know, we’ve seen a few challenges in some geographies, you know, from tariffs and some uncertainty.

We’ve seen a little bit of in some areas, health care as an example and education that maybe are not as strong as what we’d like to see. But I would also tell you that we’ve got stronger value proposition than ever in some of those places. Our ability to be able to do interactive video, we think, is gonna be important. Our ability to be able to do HIPAA and compliant video. The healthcare organizations, we continue to have a strong value proposition. And then your last question as it relates to search, Look, we’ve seen a lot of organizations fall off a cliff 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 return on ads. Spend. We’ve focused really, really, really tight on that. I think that we’re probably more efficient than we’ve ever been in that space. We also think what I’m excited about is with some of the work we’re doing with Agenetic AI, actually have the ability to be able to help customers with SEO and search and really make video a part of that longer-term SEO strategy.

So while there are some challenges in the environment, in that space, we also view what we’re releasing in the marketplace as something that might be a solution.

Tom Champion: Okay. Maybe if I could just ask one more Gillian. I’d love to have you talk a little bit about the investment plans for the year. I think last quarter, it was up to $30 million in R&D, and it seems like you know, maybe there’s been a change there. Or some learnings and just maybe talk to us about the investment plans for the year.

Gillian Munson: Absolutely. 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 EBITDA guidance. And that really is because we’re able to get more done with less. I think it is not at all an indication of any less enthusiastic approach to investing. But as we go and deploy the money, I think we’re being very, very careful about is every dollar something we wanna spend, and we’ve been adjusting along the way.

So we’re delighted that we can have that kind of an EBITDA result 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 even when we’re in a lower growth environment. So as we build this business, 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 EBITDA margins which has actually been a trend we’ve seen over the last two years as well.

Philip Moyer: I wanna add one thing in addition. I think we’re super proud of how efficient we’ve been in this space. 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 entire business down and that code base down to a single code base. Over a period of time. 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 at which we’re innovating.

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

Bill Kerr: Hi. Thanks for the question. So you mentioned on the shareholder video that you’re testing Genetic AI features with customers now. I was hoping that you might be able to describe you know, what some of those features look like. And what the potential timeline might look like for a broader rollout of the features that you’re testing now.

Philip Moyer: You know, I’ve recently seen some statistics that state that over 64% of companies in the world are rolling out AI agents. And we intend to make Vimeo a part of that AI agent ecosystem. The ability to be able to use any AI agent that you want and be able to query the Vimeo library to be able to ask questions. You know, can you find a video that has my old logo? What is the most frequently watched video inside of my video library, and how long do people watch it? Is there a particular color palette that’s being used inside of this video?

Or being able to allow the customer to be able to integrate video directly into that customer support experience. Say for example, you have a complex product and 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 agentic video is literally making Vimeo like almost like ChatGPT for Vimeo. Being able to provide access to the entire library through a simple agent, a simple natural language interface. And we’re really excited. We see huge uses for this in things like healthcare, to be able to augment the patient experience.

We see the opportunity to bring down customer support costs by being a picture is worth a thousand words, you know, a video is worth a million words, and to be able to deliver that video right at the right moment, to in a customer support situation is exciting. The ability to be able to onboard employees. You know, one of the biggest contributors to our video library is Zoom.

We have an integration with Zoom, so you can imagine Zoom meetings and team meetings and Meets suddenly being able to be summarized the content, being able to give clips to be able to onboard a brand employee of these are the most important clips that you need to watch 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 amounts 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.

Bill Kerr: Okay. Great. Thank you. And then I just had one more on, on capital allocation. You guys continue to generate a significant amount of free cash flow. And you maintain a strong cash balance. Can you talk about how you’re thinking about deploying that capital, especially since it seems like you guys have gotten more efficient with your investments for this year. So just looking you know, to get some more color on that where you’re applying that We’re always looking at

Gillian Munson: sort of the three legs of the capital allocation stool, invest in the business, buy back shares, and M&A. And you know, as you’re we really were 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. 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 we do look at a lot out there. I think our bar to have something be something that we wanna devote the team’s energy to and distract from other things we’re doing is pretty high.

So far, nothing’s past that test, if you will. And then you’ve seen us buy back shares. Over time, and we clearly have an appetite for our shares, out there as we work through the years.

Bill Kerr: Okay. Very helpful. Thank you for the questions.

Gillian Munson: And that’s all for our questions. With that, I’ll turn it back over to our CEO, Philip Moyer.

Philip Moyer: So first of all, I wanna 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.

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