Industry Insider: Vimeo’s Push To Bring Back Innovation In Video Making
Vimeo is a video sharing platform that has housed thousands of videos while also promoting premium tools to assist content creators in their creative process. Vimeo found its start in 2004 with Jake Lodwick and Zach Klein and was later bought by IAC, who currently holds the IP for the site.
On November 6th Gillian Munson, CFO, presented the third quarter of 2023. Munson begins by highlighting key points to Vimeo’s success. The first among these would be the increase of total bookings by 4 percent and this has been an increase that has seen advancement year-over-year. Munson provides context by claiming the cause of this phenomenon was due to, “a reduction in the rate of decline in self-serving add-ons, strong growth in Vimeo Enterprise and a shift in timing of a large OTT renewal from Q4 into Q3 in our other category.” The effects here can be demonstrated by the increase in subscribers as the growth margin is shown to be impacted by 46 percent year-over-year. So, with such a sturdy upward mobility the adjusted EBITDA was promoted to flourish to $13 million this quarter alone.
In terms of cash flow, this quarter didn’t disappoint Vimeo as accented by Munson. Total cash flow was set at $291 million with the free cash flow sitting at $17 million. Munson recognizes these achievements as playing a part in the company completing one of three objectives intended to structure Vimeo’s financial goals for 2023.
Delivering revenue declines in the mid-single digits;
Posting adjusted EBITDA of $5 million to $10 million
Returning to bookings growth in the second half
He follows up these numbers by emphasizing the company’s recent partnership ties with Oxford University, Tory Burch, and Alarm.com. The impact of these partnerships were felt throughout the sectors as each company signed with a different purpose. Tory Burch for live performances, Oxford and Alarm.com signing on for organization management, and another partner, Forrester Research, using Vimeo’s services for marketing. This is the reason that Vimeo amplifies their self-serve and add-on services because this is the primary selling point for the company’s bookings. However, the numbers have yet to match Vimeo’s intentions in terms of this unique marker to their site. It has been reported in the company’s shareholder letter that these bookings have seen growth since the second quarter. For comparison, “In Q3, subscribers were down 9% year-over-year, a rate similar to Q2, offset by an ARPU that was up 3% year-over-year and 3% sequentially.” Vimeo makes it clear in this letter that it will continue to prioritize this market as it is a vital addition to the company that holds significant potential.
Munson predicts that the fourth quarter will see a decline in bookings as the market and company may become congested by the end of the year in other areas. Here, there is even greater emphasis on the need for the self-serve and add-on sector to advance over time. So while the company allows space for these aspects to develop naturally Munson sees an opportunity to focus profit on product based materials. This change will ultimately impact the fourth quarter negatively during this shifting period. The bookings will remain the primary account for Vimeo’s business model but the introduction of other revenue makers will aid in brand development.
