Vimeo 2025 Q1 Earnings Misses Targets with Net Income Down 164.5%

Vimeo (VMEO) reported its fiscal 2025 Q1 earnings on May 05th, 2025. The company missed expectations with a net income decline of 164.5% compared to the previous year. Vimeo's guidance for 2025 remains in line, with EBITDA projected between $25 million and $30 million. The company aims to achieve continued growth in its self-service and enterprise segments, despite ongoing macroeconomic challenges.

Revenue
Vimeo's total revenue for Q1 2025 declined by 1.8% year-over-year to $103.03 million. The Self-Serve & Add-Ons segment generated $64.69 million, with Self-Serve contributing $56.11 million and Add-Ons adding $8.58 million. Vimeo Enterprise saw a 32% increase to $24.42 million, OTT contributed $12.24 million, and the Other segment brought in $1.67 million.

Earnings/Net Income
Vimeo swung to a loss of $0.02 per share in Q1 2025, reversing a profit of $0.04 per share in Q1 2024, marking a significant negative change in earnings per share.

Price Action
The stock price of Vimeo increased by 1.58% during the latest trading day, rose 2.18% over the past week, but fell 2.28% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Vimeo (VMEO) shares post-earnings release and holding for 30 days has underperformed over the past five years, delivering a total return of -44.97% and a Sharpe ratio of -0.33, indicating substantial risk and negative returns. The maximum drawdown of -70.60% underscores the strategy's high risk, while volatility at 44.82% points to unpredictable returns. This approach has also underperformed against the benchmark, with an excess return of -65.13% and a compound annual growth rate (CAGR) of -14.91%. The data highlights the considerable risk and volatility associated with this strategy, making it less favorable compared to other investment approaches.

CEO Commentary
Philip Moyer, CEO, expressed optimism for Vimeo's Q1 2025 performance, noting a 6% growth in self-service bookings and a 32% rise in Enterprise revenue. Strategic investments focus on innovation and profitable growth in 2025, despite macroeconomic uncertainties. Moyer emphasized adjusting key performance indicators for Enterprise to enhance value creation and cost efficiency for clients.

Guidance
For 2025, Vimeo projects EBITDA between $25 million and $30 million, with investments up to $30 million. The company anticipates growth in self-service and aggressive targets for the Enterprise segment, focusing on expanding average revenue per user and average order value. Despite challenges, the outlook remains positive with robust growth targets.

Additional News
In recent weeks, Vimeo has seen significant insider trading activity, with four key executives purchasing company shares, signaling confidence in the company's future. Notably, CEO Philip Moyer acquired 18,519 shares, while CFO Gillian Munson bought 7,272 shares. Additionally, Vimeo announced plans to invest up to $30 million in growth initiatives, concentrating on enhancing AI capabilities, security, and video formats. This investment is part of Vimeo's strategy to drive double-digit growth by the end of 2025. The company's strong cash position supports these initiatives, aiming to maintain profitability while expanding its market presence.