Vimeo Reports Q3 2021 Financial Results
Q3 Revenue increases 33% to
“Vimeo delivered its first
($ in millions except per share amounts)
Q3 2021 | Q3 2020 | ||||||||
Revenue | $ | 100.1 | $ | 75.1 | |||||
Gross profit | 74.9 | 52.3 | |||||||
Gross margin | 75 | % | 70 | % | |||||
Operating income (loss) | (11.5 | ) | (7.5 | ) | |||||
Net income (loss) | (11.7 | ) | (9.8 | ) | |||||
Diluted EPS | (0.07 | ) | (0.06 | ) | |||||
Adjusted EBITDA | 0.8 | 2.7 |
See reconciliations of GAAP to non-GAAP measures beginning on page 6.
Q3 2021 HIGHLIGHTS
- Revenue increased 33% year on year driven by a 14% increase in subscribers and 15% growth in ARPU. Enterprise revenue grew more than 60% in the quarter, and Vimeo now has more than 6,000 paying Enterprise customers.
- Operating Loss: GAAP operating loss was
$11.5 million , compared to GAAP operating loss of$7.5 million in the third quarter of fiscal 2020.
- Adjusted EBITDA: Adjusted EBITDA was
$0.8 million , compared to$2.7 million in the third quarter of fiscal 2020.
- Cash Flow / Liquidity: Cash flow from operating activities was
$9.4 million , compared to$8.9 million in the third quarter of fiscal 2020. Free cash flow was$9.4 million , compared to$8.6 million in the third quarter of fiscal 2020. We ended the quarter with$340.6 million in cash and cash equivalents.
RECENT BUSINESS HIGHLIGHTS
- Launched Vimeo Events, a new solution for marketers to easily deliver virtual events from beginning to end, without the need for a dedicated production team. Vimeo Events adds powerful webinar functionality, a DIY live production studio, and effective audience engagement tools to the rest of Vimeo’s video suite. The product includes an intuitive scene-builder, marketing technology integrations with Marketo, Mailchimp, Hubspot, and others, and a centralized hub to manage registrations, send automated email reminders, access viewer-level analytics, and edit post-event content. Vimeo Events is available in both self-serve and enterprise plans.
- Continued to scale
Video Library , a secure content hub for employees to share and access knowledge across teams, with over 500 Enterprise customers onboarded since launch. Further expanded our video suite with additional editing functionality, team management capabilities, multiple language captioning, and customizable branding.
- Added and expanded Enterprise customers across diverse industries, including Bayer, Hearst Media, Michelin, Whirlpool, Moody’s, and Spotify.
- Launched new partnerships with Dolby, Apple and Figma, and new product integrations with LinkedIn and
Patreon , and scaled our existing partnerships withTikTok , Shopify, and Facebook.
VIDEO CONFERENCE CALL
Vimeo will live stream a video conference to answer questions regarding its third quarter results on
GAAP FINANCIAL STATEMENTS | |||||||||||||||||||
($ in thousands except per share data) | |||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Revenue | $ | 100,090 | $ | 75,130 | $ | 285,558 | $ | 199,432 | |||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 25,189 | 22,869 | 75,916 | 64,126 | |||||||||||||||
Gross profit | 74,901 | 52,261 | 209,642 | 135,306 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development expense | 26,683 | 16,476 | 75,221 | 48,031 | |||||||||||||||
Sales and marketing expense | 37,790 | 25,643 | 110,107 | 77,287 | |||||||||||||||
General and administrative expense | 20,590 | 10,954 | 56,616 | 34,141 | |||||||||||||||
Depreciation | 297 | 106 | 597 | 266 | |||||||||||||||
Amortization of intangibles | 1,055 | 6,613 | 4,526 | 12,651 | |||||||||||||||
Total operating expenses | 86,415 | 59,792 | 247,067 | 172,376 | |||||||||||||||
Operating loss | (11,514 | ) | (7,531 | ) | (37,425 | ) | (37,070 | ) | |||||||||||
Interest expense | (124 | ) | — | (310 | ) | — | |||||||||||||
Interest expense–related party | — | (2,160 | ) | (726 | ) | (6,985 | ) | ||||||||||||
Other (expense) income, net | (64 | ) | 89 | 10,165 | (134 | ) | |||||||||||||
Loss before income taxes | (11,702 | ) | (9,602 | ) | (28,296 | ) | (44,189 | ) | |||||||||||
Income tax benefit (provision) | 37 | (205 | ) | (448 | ) | (654 | ) | ||||||||||||
Net loss | $ | (11,665 | ) | $ | (9,807 | ) | $ | (28,744 | ) | $ | (44,843 | ) | |||||||
Per share information: | |||||||||||||||||||
Basic loss per share | $ | (0.07 | ) | $ | (0.06 | ) | $ | (0.18 | ) | $ | (0.28 | ) | |||||||
Diluted loss per share | $ | (0.07 | ) | $ | (0.06 | ) | $ | (0.18 | ) | $ | (0.28 | ) | |||||||
Weighted average shares outstanding used in the computation of net loss per share (a): | |||||||||||||||||||
Basic | 160,064 | 159,381 | 159,624 | 159,381 | |||||||||||||||
Diluted | 160,064 | 159,381 | 159,624 | 159,381 | |||||||||||||||
Stock-based compensation expense by function: | |||||||||||||||||||
Cost of revenue | $ | 159 | $ | 26 | $ | 348 | $ | 51 | |||||||||||
Research and development expense | 3,872 | 1,317 | 11,340 | 2,483 | |||||||||||||||
Sales and marketing expense | 1,183 | 210 | 3,003 | 540 | |||||||||||||||
General and administrative expense | 5,720 | 1,973 | 15,850 | 6,483 | |||||||||||||||
Total stock-based compensation expense | $ | 10,934 | $ | 3,526 | $ | 30,541 | $ | 9,557 | |||||||||||
(a) Weighted average basic and diluted shares outstanding for the three and nine months ended
($ in thousands) | |||||||||
2021 |
2020 |
||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 340,618 | $ | 110,011 | |||||
Accounts receivable, net | 16,649 | 12,785 | |||||||
Prepaid expenses and other current assets | 16,256 | 7,932 | |||||||
Total current assets | 373,523 | 130,728 | |||||||
Leasehold improvements and equipment, net | 3,035 | 3,321 | |||||||
219,337 | 219,337 | ||||||||
Intangible assets with definite lives, net | 6,328 | 10,854 | |||||||
Other non-current assets | 18,243 | 6,839 | |||||||
TOTAL ASSETS | $ | 620,466 | $ | 371,079 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
LIABILITIES: | |||||||||
Accounts payable, trade | $ | 13,300 | $ | 3,324 | |||||
Promissory note due on demand—related party | — | 44,565 | |||||||
Deferred revenue | 168,169 | 137,436 | |||||||
Accrued expenses and other current liabilities | 52,066 | 47,432 | |||||||
Total current liabilities | 233,535 | 232,757 | |||||||
Long-term debt—related party | — | 50,000 | |||||||
Other long-term liabilities | 7,606 | 3,242 | |||||||
Commitments and contingencies | |||||||||
SHAREHOLDERS' EQUITY: | |||||||||
Common stock | 1,558 | — | |||||||
Class B common stock | 94 | — | |||||||
Class A Voting common stock of Vimeo OpCo | — | 837 | |||||||
Class |
— | 663 | |||||||
Preferred stock | — | — | |||||||
Additional paid-in-capital | 689,483 | 366,676 | |||||||
Accumulated deficit | (311,753 | ) | (283,009 | ) | |||||
Accumulated other comprehensive loss | (57 | ) | (87 | ) | |||||
Total shareholders' equity | 379,325 | 85,080 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 620,466 | $ | 371,079 |
($ in thousands) | |||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net loss | $ | (11,665 | ) | $ | (9,807 | ) | $ | (28,744 | ) | $ | (44,843 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||
Stock-based compensation expense | 10,934 | 3,526 | 30,541 | 9,557 | |||||||||||||||
Amortization of intangibles | 1,055 | 6,613 | 4,526 | 12,651 | |||||||||||||||
Depreciation | 297 | 106 | 597 | 266 | |||||||||||||||
Provision for credit losses | 222 | (76 | ) | 502 | 1,546 | ||||||||||||||
Gain on the sale of an asset | 66 | (288 | ) | (10,151 | ) | (288 | ) | ||||||||||||
Other adjustments, net | (98 | ) | 745 | 442 | 3,131 | ||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Accounts receivable | (1,442 | ) | (1,968 | ) | (6,690 | ) | (8,723 | ) | |||||||||||
Prepaid expenses and other assets | 784 | (800 | ) | (5,316 | ) | (2,664 | ) | ||||||||||||
Accounts payable and other liabilities | 5,357 | 754 | 8,383 | 1,833 | |||||||||||||||
Deferred revenue | 3,929 | 10,095 | 33,500 | 46,621 | |||||||||||||||
Net cash provided by operating activities | 9,439 | 8,900 | 27,590 | 19,087 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Capital expenditures | (87 | ) | (271 | ) | (302 | ) | (704 | ) | |||||||||||
Proceeds from the sale of an asset | 94 | 288 | 7,862 | 288 | |||||||||||||||
Other, net | — | — | — | 98 | |||||||||||||||
Net cash provided by (used in) investing activities | 7 | 17 | 7,560 | (318 | ) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Proceeds from sale of common stock, net of fees | — | — | 299,750 | — | |||||||||||||||
Principal payments on related-party debt | — | (27,604 | ) | (94,565 | ) | (35,457 | ) | ||||||||||||
Proceeds from issuance of related-party debt | — | 28,600 | — | 28,600 | |||||||||||||||
Deferred financing costs | — | — | (1,440 | ) | — | ||||||||||||||
Withholding taxes paid related to equity awards | (761 | ) | (43 | ) | (8,942 | ) | (1,132 | ) | |||||||||||
Proceeds from exercise of stock options | 902 | — | 906 | — | |||||||||||||||
Other, net | — | — | — | — | |||||||||||||||
Net cash provided by (used in) financing activities | 141 | 953 | 195,709 | (7,989 | ) | ||||||||||||||
Total cash provided | 9,587 | 9,870 | 230,859 | 10,780 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 11 | (14 | ) | (46 | ) | (46 | ) | ||||||||||||
Net increase in cash and cash equivalents and restricted cash | 9,598 | 9,856 | 230,813 | 10,734 | |||||||||||||||
Cash and cash equivalents and restricted cash at beginning of period | 331,252 | 2,841 | 110,037 | 1,963 | |||||||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 340,850 | $ | 12,697 | $ | 340,850 | $ | 12,697 | |||||||||||
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
($ in millions; rounding differences may occur)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Reconciliation of gross profit: | |||||||||||||||||||
GAAP Gross profit | $ | 74.9 | $ | 52.3 | $ | 209.6 | $ | 135.3 | |||||||||||
% of Revenue | 75 | % | 70 | % | 73 | % | 68 | % | |||||||||||
Add back: Stock-based compensation expense | 0.2 | — | 0.3 | 0.1 | |||||||||||||||
Non-GAAP Gross Profit | $ | 75.1 | $ | 52.3 | $ | 210.0 | $ | 135.4 | |||||||||||
% of Revenue | 75 | % | 70 | % | 74 | % | 68 | % | |||||||||||
Reconciliation of operating expenses: | |||||||||||||||||||
$ | 26.7 | $ | 16.5 | $ | 75.2 | $ | 48.0 | ||||||||||||
% of Revenue | 27 | % | 22 | % | 26 | % | 24 | % | |||||||||||
Less: Stock-based compensation expense | 3.9 | 1.3 | 11.3 | 2.5 | |||||||||||||||
$ | 22.8 | $ | 15.2 | $ | 63.9 | $ | 45.5 | ||||||||||||
% of Revenue | 23 | % | 20 | % | 22 | % | 23 | % | |||||||||||
GAAP Sales and marketing expense | $ | 37.8 | $ | 25.6 | $ | 110.1 | $ | 77.3 | |||||||||||
% of Revenue | 38 | % | 34 | % | 39 | % | 39 | % | |||||||||||
Less: Stock-based compensation expense | 1.2 | 0.2 | 3.0 | 0.5 | |||||||||||||||
Non-GAAP Sales and marketing expense | $ | 36.6 | $ | 25.4 | $ | 107.1 | $ | 76.7 | |||||||||||
% of Revenue | 37 | % | 34 | % | 38 | % | 38 | % | |||||||||||
GAAP General and administrative expense | $ | 20.6 | $ | 11.0 | $ | 56.6 | $ | 34.1 | |||||||||||
% of Revenue | 21 | % | 15 | % | 20 | % | 17 | % | |||||||||||
Less: Stock-based compensation expense | 5.7 | 2.0 | 15.9 | 6.5 | |||||||||||||||
Non-GAAP General and administrative expense | $ | 14.9 | $ | 9.0 | $ | 40.8 | $ | 27.7 | |||||||||||
% of Revenue | 15 | % | 12 | % | 14 | % | 14 | % | |||||||||||
Reconciliation of net loss to Adjusted EBITDA: | |||||||||||||||||||
Net loss | $ | (11.7 | ) | $ | (9.8 | ) | $ | (28.7 | ) | $ | (44.8 | ) | |||||||
Add back: | |||||||||||||||||||
Income tax (benefit) provision | — | 0.2 | 0.4 | 0.7 | |||||||||||||||
Other expense (income) , net | 0.1 | (0.1 | ) | (10.2 | ) | 0.1 | |||||||||||||
Interest expense–related party | — | 2.2 | 0.7 | 7.0 | |||||||||||||||
Interest expense | 0.1 | — | 0.3 | — | |||||||||||||||
Operating loss | (11.5 | ) | (7.5 | ) | (37.4 | ) | (37.1 | ) | |||||||||||
% of Revenue | (12 | )% | (10 | )% | (13 | )% | (19 | )% | |||||||||||
Add back: | |||||||||||||||||||
Stock-based compensation expense | 10.9 | 3.5 | 30.5 | 9.6 | |||||||||||||||
Depreciation | 0.3 | 0.1 | 0.6 | 0.3 | |||||||||||||||
Amortization of intangibles | 1.1 | 6.6 | 4.5 | 12.7 | |||||||||||||||
Adjusted EBITDA | $ | 0.8 | $ | 2.7 | $ | (1.8 | ) | $ | (14.6 | ) | |||||||||
% of Revenue | 1 | % | 4 | % | (1 | )% | (7 | )% |
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
($ in millions except per share data; shares in thousands; rounding differences may occur)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Reconciliation of net loss to Adjusted net income (loss): | |||||||||||||||||||
Net loss | $ | (11.7 | ) | $ | (9.8 | ) | $ | (28.7 | ) | $ | (44.8 | ) | |||||||
% of Revenue | (12 | )% | (13 | )% | (10 | )% | (22 | )% | |||||||||||
Add back: | |||||||||||||||||||
Stock-based compensation expense | 10.9 | 3.5 | 30.5 | 9.6 | |||||||||||||||
Depreciation | 0.3 | 0.1 | 0.6 | 0.3 | |||||||||||||||
Amortization of intangibles | 1.1 | 6.6 | 4.5 | 12.7 | |||||||||||||||
Income tax effects related to non-GAAP adjustments | — | — | — | — | |||||||||||||||
Adjusted Net income (loss) | $ | 0.6 | $ | 0.4 | $ | 6.9 | $ | (22.4 | ) | ||||||||||
% of Revenue | 1 | % | 1 | % | 2 | % | (11 | )% | |||||||||||
Reconciliation of diluted loss per share to Adjusted EPS: | |||||||||||||||||||
Diluted loss per share | $ | (0.07 | ) | $ | (0.06 | ) | $ | (0.18 | ) | $ | (0.28 | ) | |||||||
Add back: | |||||||||||||||||||
Stock-based compensation expense | 0.07 | 0.02 | 0.19 | 0.06 | |||||||||||||||
Depreciation | — | — | — | — | |||||||||||||||
Amortization of intangibles | 0.01 | 0.04 | 0.03 | 0.08 | |||||||||||||||
Income tax effects related to non-GAAP adjustments | — | — | — | — | |||||||||||||||
Adjusted EPS | $ | — | $ | — | $ | 0.04 | $ | (0.14 | ) | ||||||||||
Diluted weighted average shares | 160,064 | 159,381 | 159,624 | 159,381 | |||||||||||||||
Computation of Free Cash Flow: | |||||||||||||||||||
Net cash provided by operating activities | $ | 9.4 | $ | 8.9 | $ | 27.6 | $ | 19.1 | |||||||||||
Less: Capital expenditures | (0.1 | ) | (0.3 | ) | (0.3 | ) | (0.7 | ) | |||||||||||
Free Cash Flow | $ | 9.4 | $ | 8.6 | $ | 27.3 | $ | 18.4 |
PRINCIPLES OF FINANCIAL REPORTING
Vimeo has provided in this press release certain non-GAAP financial measures, including Adjusted EBITDA, non-GAAP gross profit, non-GAAP operating expenses, Adjusted net income (loss), Adjusted EPS and free cash flow, to supplement our financial information presented in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing Vimeo's financial results with other companies in its industry, many of which present similar non-GAAP financial measures. However, our presentation of these non-GAAP financial measures may differ from the presentation of similarly titled measures by other companies. Adjusted EBITDA is the metric on which our internal budgets are based and also the metric by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Vimeo endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and corresponding non-GAAP measure, which are included in this release. Interim results are not necessarily indicative of the results that may be expected for a full year.
Definitions of Non-GAAP Measures
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. The above items ("Adjusted EBITDA Non-GAAP Adjustments") are excluded from our Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
Non-GAAP gross profit excludes the effect of stock-based compensation included in Cost of revenue.
Non-GAAP operating expenses include
Adjusted net income (loss) and Adjusted EPS exclude the effect of the Adjusted EBITDA Non-GAAP Adjustments, as well as the related income tax effects. Adjusted EPS is calculated by dividing Adjusted net income by the Diluted weighted average shares outstanding used in the computation of net loss per share.
Free Cash Flow is defined as net cash used in operating activities less cash used for capital expenditures. We believe Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash.
Non-Cash Expenses That Are Excluded From Non-GAAP Measures
Stock-based compensation expense consists of expense associated with the grants of Vimeo stock appreciation rights ("SARs"), including performance-based SARs, restricted stock awards, and restricted stock units. These expenses are not paid in cash and we view the economic costs of stock-based awards to be the dilution to our share base; we also consider the dilutive impact of the stock-based awards in GAAP diluted earnings per share, to the extent such impact is dilutive. Equity awards are generally settled on a gross basis in shares of Vimeo common stock such that individual award holders will pay their withholding tax obligation, generally by selling shares of Vimeo common stock (including a portion of the shares received in connection with the applicable exercise).
Depreciation is a non-cash expense relating to our leasehold improvements and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as customer relationships, technology and trade names, are valued and amortized over their estimated lives. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.
Gains and losses recognized on changes in the fair value of contingent consideration arrangements are accounting adjustments to report contingent consideration liabilities at fair value. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.
Metric Definitions
Gross Margin – Revenue less cost of revenue, divided by revenue.
Subscribers – The number of users who have an active subscription to one of Vimeo’s paid plans measured at the end of the relevant period. Vimeo counts each account with a subscription plan as a subscriber. In the case of enterprise customers who maintain multiple accounts across Vimeo’s platforms as part of a single enterprise subscription plan, Vimeo counts only one subscriber. Vimeo does not count team members who have access to a subscriber’s account as additional subscribers.
Average Subscribers – The sum of the number of Subscribers at the beginning and at the end of the relevant measurement period divided by two.
Average Revenue per User (“ARPU”) – The annualized revenue for the relevant period divided by Average Subscribers. For periods that are less than a full year, annualized revenue is calculated by dividing the revenue for that particular period by the number of calendar days in the period and multiplying this value by the number of days in that year.
Enterprise Customers – Subscribers who purchase plans through contact with our sales force.
OTHER INFORMATION
Cautionary Statement Regarding Forward-Looking Information
This press release and the Vimeo livestream which will be held at
About Vimeo
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