Vimeo Inc.
10/28/2025 | Press release | Distributed by Public on 10/28/2025 14:07
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
GENERAL
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Vimeo consolidated financial statements for the three and nine months ended September 30, 2025included in "Item 1-Consolidated Financial Statements."
Pending Merger with Bending Spoons
As previously disclosed, on September 10, 2025, Vimeo, Inc., a Delaware corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with Bending Spoons US Inc., a Delaware corporation ("Parent"), Bending Spoons S.p.A., an Italiansocietá per azioni(solely for purposes of the sections specified therein) ("Guarantor"), and Bloomberg Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"). The board of directors of the Company (the "Board") unanimously approved the Merger and the Merger Agreement. The Merger Agreement is an all-cash transaction valued at approximately $1.38 billion. Under the terms of the Merger Agreement, Vimeo shareholders will receive $7.85 per share in cash for each share of Vimeo capital stock that they own. The stockholders of the Company, who are of record as of October 21, 2025, will vote on the Merger and the Merger Agreement at the stockholder meeting on November 19, 2025. If the Merger is not completed, then under certain circumstances Vimeo may be required to pay Bending Spoons US Inc. a termination fee of $40.1 million.
The Company recorded transaction costs of $5.9 million in connection with the pending Merger during the three months ended September 30, 2025. Such costs are included within General and administrative expenses in the Consolidated Statement of Operations. The Company expects additional transaction related fees and expenses to be incurred including upon successful completion of the Merger.
If the Merger is consummated, our common stock will no longer be publicly listed and traded on The Nasdaq Stock Market LLC, the common stock will be deregistered under the Securities Exchange Act of 1934, we will no longer file periodic reports with the Securities and Exchange Commission ("SEC") and existing stockholders will cease to have any ownership interest in Vimeo.
Operating Metrics and Key Terms:
In the first quarter of 2025, the Company adjusted its operating metrics and key terms by disaggregating our revenue and associated metrics into different categories. We believe that this better reflects how the Company is managed and provides greater clarity into the Company's business for its stockholders. Please see below for a description of these operating metrics and key terms and the changes from our prior presentation.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| (In thousands, except ARPU) | |||||||||||||||||||||||||||||||||||
| Self-Serve: | |||||||||||||||||||||||||||||||||||
| Subscribers | 1,127.9 | 1,269.1 | (11) | % | 1,127.9 | 1,269.1 | (11) | % | |||||||||||||||||||||||||||
| Average Subscribers | 1,142.2 | 1,283.6 | (11) | % | 1,174.7 | 1,320.9 | (11) | % | |||||||||||||||||||||||||||
| ARPU | $ | 204 | $ | 181 | 13 | % | $ | 196 | $ | 178 | 10 | % | |||||||||||||||||||||||
| Bookings | $ | 60,837 | $ | 53,583 | 14 | % | $ | 186,922 | $ | 169,898 | 10 | % | |||||||||||||||||||||||
| Vimeo Enterprise: | |||||||||||||||||||||||||||||||||||
| Subscribers | 4.2 | 3.8 | 10 | % | 4.2 | 3.8 | 10 | % | |||||||||||||||||||||||||||
| Average Subscribers | 4.1 | 3.7 | 10 | % | 4.1 | 3.6 | 14 | % | |||||||||||||||||||||||||||
| ARPU | $ | 24,567 | $ | 23,043 | 7 | % | $ | 24,537 | $ | 22,487 | 9 | % | |||||||||||||||||||||||
| Bookings | $ | 24,620 | $ | 25,092 | (2) | % | $ | 72,834 | $ | 68,460 | 6 | % | |||||||||||||||||||||||
| OTT: | |||||||||||||||||||||||||||||||||||
| Subscribers | 3.1 | 3.1 | - | % | 3.1 | 3.1 | - | % | |||||||||||||||||||||||||||
| Average Subscribers | 3.1 | 3.0 | 3 | % | 3.1 | 3.1 | 2 | % | |||||||||||||||||||||||||||
| ARPU | $ | 15,240 | $ | 16,363 | (7) | % | $ | 15,562 | $ | 16,597 | (6) | % | |||||||||||||||||||||||
| Bookings | $ | 8,221 | $ | 11,092 | (26) | % | $ | 24,651 | $ | 28,177 | (13) | % | |||||||||||||||||||||||
When the following terms appear in MD&A, they have the meanings indicated below:
•Self-Serverelates to our subscription plans sold directly online through our website or apps, which include features such as video creation, collaboration, distribution, hosting, marketing, monetization, and analytics. Subscribers pay subscription fees with a credit card or an in-app purchase mechanism.
•Vimeo Enterpriserelates to our video offering designed for teams and organizations, which includes the same capabilities of Self-Serve plus enterprise-grade features such as advanced security, custom user permissions, single-sign on for employees, interactive video tools, and marketing software integrations. Vimeo Enterprise is sold through our sales force and is often an upgrade from Vimeo's Self-Serve as the number of users or use cases in an organization grows.
•OTT relates to our over-the-top ("OTT") video monetization solution that allows customers to launch and run their own video streaming channel directly to their audience through a branded web portal, mobile apps, and Internet-enabled TV apps. Revenue and operating metrics derived from OTT had previously been included in Other.
•Add-Ons relates to add-on services tied to our online subscriptions such as bandwidth charges, which are sold through our sales force to subscribers of one of our plans if they exceed a certain threshold of bandwidth. Revenue derived from Add-Ons had previously been included in Self-Serve & Add-Ons.
•Otherprimarily includes Magisto and Livestream.
•Subscribersis 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 customer with a subscription plan as a subscriber regardless of the number of users. In the case of customers who maintain subscriptions across Self-Serve, Vimeo Enterprise, and OTT, Vimeo counts one subscriber for each of the components in which they maintain one or more subscriptions. Vimeo does not count users or team members who have access to a subscriber's account as additional subscribers.
•Average Subscribersis 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")is 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 calendar days in that year.
•Bookings consist offixed fees for software-as-a-service ("SaaS") services, measured at the end of the relevant period, that subscribers have committed to pay during their subscription period, which is generally 12 months, less refunds and chargebacks during the same period.
•Gross Marginis revenue less cost of revenue, divided by revenue.
•Cost of Revenue consists primarily of hosting fees, credit card processing fees, compensation expense and other employee-related costs, and stock-based compensation expense for personnel engaged in customer care functions, traffic acquisition costs, which includes in-app purchase fees, and outsourced customer care personnel costs.
•Research and Development Expense consists primarily of compensation expense and other employee-related costs and stock-based compensation expense that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology, software license and maintenance costs, rent expense and facilities costs.
•Sales and Marketing Expense consists primarily of compensation expense and other employee-related costs and stock-based compensation expense for Vimeo's sales force and marketing personnel, advertising expenditures, which include online marketing, including fees paid to search engines, social media sites, e-mail campaigns, display advertising, video advertising and affiliate marketing, and offline marketing, which includes conferences and events, software license and maintenance costs, rent expense and facilities costs.
•General and Administrative Expense consists primarily of compensation expense and other employee-related costs and stock-based compensation expense for personnel engaged in executive management, finance, legal, tax, information technology and human resources, provision for credit losses, fees for professional services, including transaction costs related to the Merger, rent expense, facilities costs, software license and maintenance costs, and business insurance.
•Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and a reconciliation of net (loss) earnings to Adjusted EBITDA, for the three and nine months ended September 30, 2025 and 2024.
MANAGEMENT OVERVIEW
Vimeo is the world's most innovative video experience platform, providing a full breadth of video tools through a SaaS model. Our core focus is transforming how people create and share videos by providing cutting-edge products and a platform that bridges technology with creative innovation. We provide a turnkey cloud-based solution that eliminates barriers to using video and solves essential video needs, including video hosting and management, intuitive video creation and editing, insightful analytics, artificial intelligence language translations, and enterprise tools.
Sources of Revenue
Vimeo's revenue is derived primarily from fixed SaaS subscription fees paid by customers. Revenue is recognized on a straight-line basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Subscription periods generally range from one month to three years with the most common being an annual subscription and are generally non-cancellable.
Distribution, Marketing and Advertiser Relationships
Vimeo pays to market and distribute its services on third-party search engines and social media websites, and through e-mail campaigns, display advertising, video advertising and affiliate marketing, and offline marketing, which includes conferences and events. Vimeo also pays traffic acquisition costs, which consist of fees paid to Apple and Google related to the distribution and the facilitation of in-app purchases of product features. These distribution channels might also offer other third parties services and products, which may compete with those Vimeo offers.
Vimeo also markets and offers its services and products through branded websites, allowing customers to transact directly with it in a convenient manner.
Results of Operations for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024
Results of operations for the periods presented as a percentage of our revenue are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (as a % of revenue) | |||||||||||||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Cost of revenue (exclusive of depreciation shown separately below) | 22 | 21 | 23 | 22 | |||||||||||||||||||
| Gross profit | 78 | 79 | 77 | 78 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development expense | 30 | 25 | 29 | 26 | |||||||||||||||||||
| Sales and marketing expense | 29 | 28 | 30 | 28 | |||||||||||||||||||
| General and administrative expense | 23 | 19 | 20 | 18 | |||||||||||||||||||
| Depreciation | - | - | - | - | |||||||||||||||||||
| Amortization of intangibles | - | - | - | - | |||||||||||||||||||
| Total operating expenses | 82 | 72 | 80 | 73 | |||||||||||||||||||
| Operating (loss) income | (4) | 7 | (2) | 6 | |||||||||||||||||||
| Interest expense | - | - | - | - | |||||||||||||||||||
| Other income, net | 3 | 3 | 3 | 4 | |||||||||||||||||||
| Loss (earnings) before income taxes | (1) | 11 | - | 9 | |||||||||||||||||||
| Income tax provision | (1) | (2) | - | (1) | |||||||||||||||||||
| Net (loss) earnings | (2) | % | 9 | % | - | % | 8 | % | |||||||||||||||
Revenue
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Self-Serve | $ | 58,743 | $ | 58,356 | $ | 387 | 1 | % | $ | 172,410 | $ | 175,837 | $ | (3,427) | (2) | % | |||||||||||||||||||||||||||||||
| Vimeo Enterprise | 25,503 | 21,675 | 3,828 | 18 | 74,924 | 60,193 | 14,731 | 24 | |||||||||||||||||||||||||||||||||||||||
| OTT | 11,881 | 12,358 | (477) | (4) | 36,392 | 38,058 | (1,666) | (4) | |||||||||||||||||||||||||||||||||||||||
| Add-Ons | 8,025 | 9,508 | (1,483) | (16) | 24,804 | 30,502 | (5,698) | (19) | |||||||||||||||||||||||||||||||||||||||
| Other | 1,604 | 2,667 | (1,063) | (40) | 4,910 | 9,260 | (4,350) | (47) | |||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 105,756 | $ | 104,564 | $ | 1,192 | 1 | % | $ | 313,440 | $ | 313,850 | $ | (410) | - | % | |||||||||||||||||||||||||||||||
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024
Revenue increased $1.2 million, or 1%, due primarily to the following:
■ Vimeo Enterprise increased $3.8 million, or 18%, due primarily to increases of 10% and 7% in Average Subscribers and ARPU, respectively.
■ Self-Serve increased $0.4 million, or 1%, due primarily to an increase of 13% in ARPU, partially offset by a decrease of 11% in Average Subscribers.
■ Add-Ons decreased $1.5 million, or 16%, due primarily to a decline in demand for bandwidth.
■ Other decreased $1.1 million, or 40%, due primarily to the Company actively deprecating a number of products in this category.
■ OTT decreased $0.5 million, or 4%, due primarily to a decrease of 7% in ARPU, partially offset by an increase of 3% in Average Subscribers.
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Revenue was relatively flat, due primarily to the following:
■ Add-Ons decreased $5.7 million, or 19%, due primarily to a decline in demand for bandwidth.
■ Other decreased $4.4 million, or 47%, due primarily to the Company actively deprecating a number of products in this category.
■ Self-Serve decreased $3.4 million, or 2%, due primarily to a decrease of 11% in Average Subscribers, partially offset by an increase of 10% in ARPU.
■ OTT decreased $1.7 million, or 4%, due primarily to a decrease of 6% in ARPU, partially offset by an increase of 2% in Average Subscribers.
■ Vimeo Enterprise increased $14.7 million, or 24%, due primarily to increases of 14% and 9% in Average Subscribers and ARPU, respectively.
Cost of revenue (exclusive of depreciation shown separately below) and Gross profit
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation shown separately below) | $ | 23,414 | $ | 21,708 | $ | 1,706 | 8 | % | $ | 70,615 | $ | 67,829 | $ | 2,786 | 4 | % | |||||||||||||||||||||||||||||||
| Gross profit | $ | 82,342 | $ | 82,856 | $ | (514) | (1) | % | $ | 242,825 | $ | 246,021 | $ | (3,196) | (1) | % | |||||||||||||||||||||||||||||||
| Gross margin | 78% | 79% | 77% | 78% | |||||||||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024
Cost of revenue increased $1.7 million, or 8%, due primarily to an increase in hosting costs of $0.7 million driven by higher overall prices for our utilization.
Gross profit decreased $0.5 million, or 1%, due primarily to the increase in cost of revenue, offset in part by the increase in revenue.
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Cost of revenue increased $2.8 million, or 4%, due primarily to an increase of $2.1 million in hosting costs driven by higher overall prices for our utilization.
Gross profit decreased $3.2 million,or 1%, due primarily to the increase in cost of revenue.
Operating Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development expense | $ | 31,208 | $ | 26,588 | $ | 4,620 | 17 | % | $ | 92,183 | $ | 81,695 | $ | 10,488 | 13 | % | |||||||||||||||||||||||||||||||
| Sales and marketing expense | 30,440 | 28,799 | 1,641 | 6 | 94,058 | 88,780 | 5,278 | 6 | |||||||||||||||||||||||||||||||||||||||
| General and administrative expense | 24,832 | 19,655 | 5,177 | 26 | 62,163 | 56,776 | 5,387 | 9 | |||||||||||||||||||||||||||||||||||||||
| Depreciation | 62 | 102 | (40) | (38) | 153 | 313 | (160) | (51) | |||||||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 391 | 347 | 44 | 12 | 1,227 | 1,042 | 185 | 18 | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 86,933 | $ | 75,491 | $ | 11,442 | 15 | % | $ | 249,784 | $ | 228,606 | $ | 21,178 | 9 | % | |||||||||||||||||||||||||||||||
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024
Research and development expense increased $4.6 million, or 17%, due primarily to an increase of $2.1 million in restructuring costs driven by a reduction-in-force implemented in the third quarter of 2025 and an increase of $1.7 million in compensation expense and other employee-related costs driven by an increase in headcount.
Sales and marketing expense increased $1.6 million, or 6%, due primarily to an increase of $1.8 million in restructuring costs driven by a reduction-in-force implemented in the third quarter of 2025.
General and administrative expense increased $5.2 million, or 26%, due primarily to an increase of $5.9 million in transactions costs driven by the Merger,partially offset by a decrease of $1.4 million in stock-based compensation expense driven by executive leadership changes.
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Research and development expense increased $10.5 million, or 13%, due primarily to an increase in compensation expense and other employee-related costs of $7.9 million driven by an increase in headcount and an increase of restructuring costs of $2.7 million primarily driven by a reduction-in-force implemented in the third quarter of 2025, partially offset by a decrease in stock-based compensation expense of $2.6 million driven by executive leadership changes.
Sales and marketing expense increased $5.3 million, or 6%, due primarily to increases of $1.7 million in restructuring costs primarily driven by a reduction-in-force implemented in the third quarter of 2025, $1.4 million in compensation expense and other employee-related costs, $1.3 million of professional fees for marketing services, and $1.1 million in stock-based compensation expense driven by executive leadership changes.
General and administrative expense increased $5.4 million, or 9%, due primarily to an increase of $5.9 million in transactions costs driven by the Merger,partially offset by a decrease of $1.7 million in stock-based compensation expense driven by executive leadership changes.
Operating (loss) income
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating (loss) income | $ | (4,591) | $ | 7,365 | $ | (11,956) | NM | $ | (6,959) | $ | 17,415 | $ | (24,374) | NM | |||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024
Operating (loss) income decreased $12.0 million due to a decrease in gross profit of $0.5 million and an increase in operating expenses of $11.4 million. The decrease in gross profit was driven by an increase in cost of revenue, offset in part by an increase in revenue. The increase in operating expenses was due primarily to increases of $5.9 million in transaction costs, $4.2 million in restructuring costs, and $1.4 million in compensation expense and other employee-related costs, partially offset by a decrease of $2.0 million in stock-based compensation expense.
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Operating (loss) income decreased $24.4 million due to a decrease in gross profit of $3.2 million and an increase in operating expenses of $21.2 million. The decrease in gross profit was driven by an increase in cost of revenue. The increase in operating expenses was due primarily to increases of $7.9 million in compensation expense and other employee-related costs, $5.9 million in transaction costs, and $5.0 million in restructuring costs, partially offset by a decrease of $3.2 million in stock-based compensation expense.
Non-Operating Income and Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 3,108 | $ | 3,827 | $ | (719) | (19) | % | $ | 9,009 | $ | 11,258 | $ | (2,249) | (20) | % | |||||||||||||||||||||||||||||||
| Foreign exchange gains (losses), net | 47 | (212) | 259 | NM | (760) | 54 | (814) | NM | |||||||||||||||||||||||||||||||||||||||
| Other income, net | $ | 3,155 | $ | 3,615 | $ | (460) | (13) | % | $ | 8,249 | $ | 11,312 | $ | (3,063) | (27) | % | |||||||||||||||||||||||||||||||
Other income, net decreased $0.5 million and $3.1 million for the three and nine months ended September 30, 2025, respectively, due primarily to a decrease in Interest income driven by lower interest rates.
Income tax provision
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | $ | (900) | $ | (1,698) | $ | 798 | (47) | % | $ | (1,257) | $ | (3,251) | $ | 1,994 | (61) | % | |||||||||||||||||||||||||||||||
Income tax provision decreased $0.8 million and $2.0 million for the three and nine months ended September 30, 2025, respectively, primarily as a result of lower pre-tax income, partially offset by the impact of the valuation allowance.
For further details of income tax matters, see "Note 3-Income Taxes" to the financial statements included in "Item 1. Consolidated Financial Statements."
Adjusted EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 12,355 | $ | 16,082 | $ | (3,727) | (23) | % | $ | 28,093 | $ | 44,595 | $ | (16,502) | (37) | % | |||||||||||||||||||||||||||||||
| As a percentage of revenue | 12% | 15% | 9% | 14% | |||||||||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024
Adjusted EBITDA decreased $3.7 million to $12.4 million, primarily due to a decrease in gross profit and an increase in operating expenses driven by an increase in compensation expense and other employee-related costs.
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Adjusted EBITDA decreased $16.5 million to $28.1 million, primarily due to a decrease in gross profit and an increase in operating expenses driven by an increase in compensation expense and other employee-related costs.
For a reconciliation of net (loss) earnings to Adjusted EBITDA, see "Principles of Financial Reporting."
PRINCIPLES OF FINANCIAL REPORTING
We have provided Adjusted EBITDA in this report to supplement our financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We use this non-GAAP financial measure internally in analyzing our financial results and believe that it is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present a similar non-GAAP financial measure. However, our presentation of this non-GAAP financial measure may differ from the presentation of similarly titled measures by other companies. Adjusted EBITDA is one of the metrics on which our internal budgets are based and also one of the metrics 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. This non-GAAP financial measure 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. We endeavor to compensate for the limitations of the non-GAAP measure 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 we discuss below.
Definition of Non-GAAP Measure
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization("Adjusted EBITDA") is defined as operating (loss) income excluding: (1) stock-based compensation expense; (2) depreciation; (3) amortization of intangibles; (4) gains and losses recognized on changes in the fair value of contingent consideration arrangements; (5) restructuring costs associated with exit or disposal activities such as a reduction in force or reorganization; and (6) transaction costs. 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 are excluded from our Adjusted EBITDA measure because these items are either non-cash or non-recurring in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
The reconciliation of net (loss) earnings to Adjusted EBITDA is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net (loss) earnings | $ | (2,336) | $ | 9,282 | $ | 33 | $ | 25,476 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
|
Income tax provision
|
900 | 1,698 | 1,257 | 3,251 | |||||||||||||||||||
| Other income, net | (3,155) | (3,615) | (8,249) | (11,312) | |||||||||||||||||||
| Operating (loss) income | (4,591) | 7,365 | (6,959) | 17,415 | |||||||||||||||||||
| Add back: | |||||||||||||||||||||||
|
Stock-based compensation expense
|
6,164 | 8,268 | 20,298 | 23,620 | |||||||||||||||||||
|
Depreciation
|
62 | 102 | 153 | 313 | |||||||||||||||||||
|
Amortization of intangibles
|
391 | 347 | 1,227 | 1,042 | |||||||||||||||||||
| Restructuring costs | 4,435 | - | 7,480 | 2,205 | |||||||||||||||||||
| Transaction costs | 5,894 | - | 5,894 | - | |||||||||||||||||||
|
Adjusted EBITDA
|
$ | 12,355 | $ | 16,082 | $ | 28,093 | $ | 44,595 | |||||||||||||||
Items That Are Excluded From Non-GAAP Measure
Stock-based compensation expense consists of expense associated with the grants of Vimeo stock-based awards. 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 stock-based awards in GAAP diluted (loss) earnings per share, to the extent such impact is dilutive.
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 intangibles are non-cash expenses related to capitalized internal-use software development costs or acquisitions. Amortization of capitalized internal-use software development costs is computed using the straight-line method to allocate the cost of such assets to operations over their estimated useful lives. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company are valued and amortized over their estimated useful lives. We believe that acquired intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization is not an ongoing cost 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.
Restructuring costsconsist of costs associated with exit or disposal activities such as severance and other post-employment benefits paid in connection with a reduction-in-force or reorganization. We consider these costs to be non-recurring in nature and therefore, are not indicative of current or future performance or the ongoing cost of doing business.
Transaction costs consist of professional fees, such as legal, financial advisory, accounting, and other costs incurred by the Company that are directly related to the Merger. We consider these costs to be non-recurring in nature and therefore, are not indicative of current or future performance or the ongoing cost of doing business.
VIMEO'S FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Position
| September 30, 2025 | December 31, 2024 | ||||||||||
| (In thousands) | |||||||||||
| Cash and cash equivalents: | |||||||||||
| United States | $ | 299,391 | $ | 304,216 | |||||||
| All other countries | 21,257 | 21,060 | |||||||||
| Total cash and cash equivalents | $ | 320,648 | $ | 325,276 | |||||||
Vimeo's international cash can be repatriated without significant tax consequences.
Cash Flow Information
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Net cash provided by (used in) | |||||||||||
| Operating activities | $ | 36,756 | $ | 46,057 | |||||||
| Investing activities | $ | (5,411) | $ | (173) | |||||||
| Financing activities | $ | (36,810) | $ | (21,993) | |||||||
Net cash provided by operating activities consists of net earnings adjusted for non-cash items and the effect of changes in working capital.
2025
Net cash provided by operating activities included net earnings of less than $0.1 million adjusted for non-cash items of $25.1 million and changes in working capital that provided $11.6 million. Changes in working capital primarily consisted of an increase of $6.9 million in deferred revenue and a decrease of $5.8 million in prepaid expenses and other assets. The increase in deferred revenue was due primarily to an increase in Self-Serve bookings. The decrease in prepaid expenses and other assets was due to the timing of invoice payments.
Net cash used in investing activities primarily included $5.3 million of capitalized internal-use software development costs.
Net cash used in financing activities primarily included $23.8 million of common stock repurchases and $14.1 million of withholding taxes paid related to the settlement of equity awards.
2024
Net cash provided by operating activities included net earnings of $25.5 million adjusted for non-cash items of $28.7 million, partially offset by changes in working capital that used $8.1 million. Changes in working capital primarily consisted of a decrease in accounts payable and other liabilities of $7.4 million and a decrease in deferred revenue of $4.2 million, partially offset by a decrease of $4.2 million in prepaid expenses and other assets. The decrease in accounts payable and other liabilities was driven by the payment of 2023 annual cash bonuses in 2024, lease payments, and estimated tax payments, partially offset by accruals for 2024 annual and supplemental cash bonuses. The decrease in deferred revenue was due primarily to lower Self-Serve, Add-Ons, and Other bookings, partially offset by growth in Vimeo Enterprise bookings. The decrease in prepaid expenses and other assets was due to the timing of invoice payments.
Net cash used in investing activities included $0.2 million of capital expenditures.
Net cash used in financing activities included $16.8 million of common stock repurchases and $5.2 million of withholding taxes paid related to the settlement of equity awards.
Liquidity and Capital Resources
Stock Repurchase Program and Activity
During the three months ended March 31, 2025, the Company repurchased 3.9 million shares of its common stock, on a trade date basis, at a weighted average cost of $6.10 per share, for an aggregate purchase price of $23.5 million and completed its authorized purchases pursuant to the program. On April 29, 2025, the Board authorized a new stock repurchase program of up to $50 million of the Company's common stock (the "2025 Repurchase Program"). See "Note 5-Shareholders' Equity" for additional information related to the 2025 Repurchase Program.
Outstanding Stock-Based Awards
Stock-based awards are settled in shares of Vimeo common stock and may be settled on a gross or net basis based upon factors deemed relevant at the time. Currently, stock-based awards are generally settled on a net basis, such that individual award holders will receive shares of Vimeo common stock, net of a number of shares of Vimeo common stock equal to the required cash tax withholding payment, which will be paid by Vimeo on the employee's behalf.
Liquidity Assessment
At September 30, 2025, Vimeo had $320.6 million in cash and cash equivalents and no debt. Vimeo believes its existing cash and cash equivalents and expected positive cash flows generated from operations will be sufficient to fund its normal operating requirements, capital expenditures, internal-use software development costs, withholding taxes related to net settled stock-based awards, and repurchases under the 2025 Repurchase Program for at least the next twelve months. Vimeo does not currently expect to incur significant capital expenditures.
Vimeo's liquidity could be negatively affected by a decrease in demand for our products and services, or the occurrence of unexpected expenses. Vimeo may need to raise additional capital through future debt or equity financings to make additional acquisitions and investments or to provide for greater financial flexibility. Additional financing may not be available on terms favorable to Vimeo or at all.
Vimeo Inc. published this content on October 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 28, 2025 at 20:09 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]