Hi, everyone. Thank you all for joining us. I'm Riana Matragis. I am an associate on the Software Equity Research team. With us today, we have Gillian Munson, the CFO of Vimeo. Thank you, Gillian, for joining us. Oh, no problem. So to get started, I was just wondering, like, what excited you about Vimeo when you joined? What brought you to the company? Sure. I joined Vimeo about two years ago, and, when I joined, what I was excited about the company is, the huge brand name it has. It's very hard to go anywhere without finding someone who's used Vimeo and knows Vimeo and actually really likes it. So unlike some larger technology brands, this is a very beloved brand and product, and I thought that was really, really interesting. I knew that the company was coming off the backside of COVID, and it had a huge, run-up in COVID. They had spun the company out. It had a lot of cash in its books, kinda like that, having the previous company been at a startup. And I felt like there were a lot of raw materials from which to go do something very interesting, and that still today is the case at Vimeo. I think the backside of COVID has been longer and harder than the company expected, than we all expected, but we're working our way through it. We've made terrific progress over the last two years in terms of getting the fundamentals of the business in the right place, and now the next step is to turn to getting the company back to some more growth. Okay. So Philip recently joined as the CEO. I just wanted to know, how has working with him been, and what have been his key priorities since joining? Sure. So Philip joined a couple of weeks ago, really, if you think about it. And he is our third CEO in two years, so a lot of it is about making sure he knows where the office is and how to get there. But he is terribly excited about the business, which makes me very happy to have a partner in, in the business that is that excited about what we're doing. And what he's really been spending his time on and is getting to know this business, understanding why customers buy, why they don't buy, why they cancel, why they upgrade, why they do whatever they do. He's a very data-driven guy and is very, very focused on the fundamentals of the business. He has spent a lot of time with the team as well, really trying to put together the raw materials to formulate where he wants to go from here with the business. So his priority right now is truly getting to know the business. That's why you have me, not him. I've been trying to keep him doing any investor stuff at our office, as opposed to getting him on the road and all that kind of stuff. So that's really the focus. We expect to give some more insight to how he's thinking about the business on our next earnings call, which likely will be in early August. I can never remember the exact date, but that makes sense to me. And that'll be sort of a culmination of a bunch of the work he's done. Certainly, it's still early days in a lot of ways, so there's a lot more to learn, but I think we'll hear a lot more from him then. Okay, makes sense. You recently mentioned that Vimeo for Enterprise is a key growth driver going forward. What are you seeing in the Enterprise? Sure. Vimeo, since about 2019, has been growing an Enterprise business quite rapidly, actually. That business is increasingly looking like it can easily be a $100 million business or greater inside the company. Just as backdrop, our company's revenue is roughly around the $400 million range. So that's a pretty big ramp-up in a product. What we were seeing at Vimeo, I wasn't at the company at the time, but what they were seeing inside the data was that the fastest growth at Vimeo, the best retention, the best ARPUs, was, were in businesses, and that that probably indicated a desire from businesses to have better video platforms inside. And so between 2019 and now, we've been building a business to really support that trend. And we continue to see really, really good growth there. We have a really terrific product that answers a lot of the questions enterprises have. We're really just getting started. Our ARPU is $20,000 in the enterprise, which means we're still not even really getting the attention of the CIO. We probably have the attention of the CISO, because what we are finding is that SSO, HIPAA, all these sort of security-oriented items are really of value to companies. And it's true of our company, too. Even for, like, a $2,000 piece of software, our CISO is on top of that. So that's, like, a really important piece of how you get some credibility in the enterprise, and our team just continues to build that out. It is still a ramping business. We are growing that business faster than anyone else that is independent in enterprise video. We're really proud of it, and I think it will, in my view, be our fastest growing business for years to come and will lead the growth of Vimeo over time. Still a lot to do from here. It's still not a majority of our revenue. We've got a lot of work to do to ramp it up, but it has a lot of momentum, and we're really very excited about it. Okay, so you'd say it's a pretty sustainable growth? Yeah. I see no reason not to believe it's gonna have really strong growth. What we have talked about, though, is that when you're growing a business like that, you get to the law of large numbers, you get to some tougher compares. So I do expect that the rate of growth will slow down, but it'll be very attractive relative to, for certain, Vimeo itself, but also within the video industry, too. Okay. What are key drivers for customer additions? So when you look at video, it is. There's sort of two ways it goes. A little over half of it, actually, a bit more than half of it now, comes out of our self-serve business. So we have 1 million-some-odd customers in self-serve. And oftentimes, what we find with our Enterprise customers is, we've identified someone in a department using video very heavily with our self-serve product, and we go and call them and say: "Wait, is there more you could do?" So that's a big piece of how we get net new Vimeo Enterprise customers. Maybe they're not net new to Vimeo, but net new at such a big scale.... We also do a lot of marketing programs aimed at enterprise customers, and that plus, you know, good old-fashioned sales, cold calling, gets you a pipeline of folks interested in video. We're a pretty easy call. If you care about video, we're gonna show up on your set of options, and so typically, you know, we're finding people via pretty traditional channels. Okay. As you've touched on, I mean, enterprise trends have been strong and shown upside. Is the growth coming from new or existing customers? We are growing the business, overall. Mm-hmm. You know, we continue to grow our business overall in terms of the customer count and in terms of the business we're doing with them. Our ARPU has been a little stuck, so it's been sitting at about $20,000. We think that should grow more, so we're not expanding that ARPU enough, and we think there's more opportunity there in terms of expanding how much each customer pays us as well. Okay, are there any specific go-to-market activities that have been particularly effective? Trying to think. I think, for Vimeo, and what is unusual about Vimeo is that we have this opportunity in our long-tail business. That's very unusual for a company like us. Mm. So, I think that is the most unique thing about Vimeo. The remainder of it is very typical enterprise sales, right? It's you do conferences, you do think pieces, you package products, you have salespeople calling out to people. But in Vimeo, what is really interesting is that we have this long tail of customers who are, on average, paying, like, $200 a year. That's a really low-cost way to go find customers for the enterprise business. Okay, and why do you think customers are choosing Vimeo Enterprise over alternatives? So my view on it is that, there are a couple things. One, they know Vimeo, they've used Vimeo, likely they've used Vimeo in their past, so it's a known entity. It's known for high quality. We are devoid of ads, so we do not sell ads. We do not put ads next to your content. You are really looking at a company that is helping you build a video platform, a SaaS-based video platform. Our price performance is fabulous compared to others in the market. Our ARPU is $20. The other sort of pure- play players are more like $90-$100. Now, don't get me wrong, I'll be delighted when we get to $100 ourselves, but, I think we look pretty good on a relative basis. We integrate with a lot of folks, and I think we have a nice amount of momentum as well. Cool. Philip mentioned you guys were entering into the fourth paradigm for video, which is AI, and I was hoping you could speak more to your AI strategy. Sure. So for any of you who have ever taped a video, it is actually not that easy, or maybe better put, it's a little bit, intimidating. So, for example, these lights, I do a lot of our investor videos. I start the video from my home office, actually, and I wear glasses, which is... I cannot see the script without the glasses, so I could pretend and make up the script, but then I also don't look like me. So when I do it, the glare is a big deal, and I have done, like, 20 takes with our AV people. "Move your head this way. Move your head that way. Move the light this way. Put a thing. Do this, that, and the other thing." It's super annoying, and super unproductive, and super important to putting out a great video. So with AI, we can just say, "Hey, AI, go in and make Gillian actually look like a normal human being without glare in her glasses," for example. You know, I'd like it to, you know, make me look a lot less, you know, lose some weight and do all those other things, too, which you can do with AI. But actually, that sprucing up of the video makes it so I can do one take, and then I can have the AI do all of the editing, right? Which is actually where all the time gets spent because what you do, for any of you who have taped videos for corporate purposes, you tape it, you go to yourself: "Do I look like an awesome portfolio manager? Ugh, I sounded kind of like I didn't believe what I was just saying. All right, let me do it again. Oh, I said, 'um,' 1,000 times." I use one of my words I use all the time. AI tools let you go in, edit the script, have the video edit with you, take out flaws in the video, and get that video out there. Video is on the rise as a corporate medium, and you really do want, in this day and age, to be out there speaking to people with video. It is intimidating, and I think AI can help a lot in that. The other thing AI can do is that video is very big data, and it's highly unstructured, and there's a lot to learn inside video content. AI can go in and do a tremendous amount there. So, for example, these are all early days things. You know, when Philip talks about the fourth dimension, I always think about Star Wars or something. But, you know, that's. There are some, like, really out there things you can do. But, for example, when our sales team has a weekly pipeline meeting, I think they meet for, like, 2 hours. I don't go to that meeting just 'cause my schedule doesn't allow it. But they take the meeting, they put it into an AI tool, it comes back as a bullet point, and here's what happened, and I can go into each piece of the video and find out who talked about what. It makes it very easy for me to scan it, reply, say: "Hey, what was that about this? What did you say about that?" And that's, like, a hugely productivity-enhancing item as well. So I think there's a lot on productivity in AI. I think there's a tremendous amount we don't even know about what we can learn about unstructured data with AI. And then you get into kind of really out there stuff around, you know, could I go tell the AI: "Here's my income statement, balance sheet, and my KPIs. Can you actually write my investor letter, and can you maybe make the video and have me in it, and then we can just edit it?" That's probably out there a little, 'cause I'm very fussy about these things, but that is what AI can do, and I think it's a big deal. Now, in terms as it relates to Vimeo, what we have as an advantage as a platform, we have over 1 million paying customers. We have a lot of large corporates buying AI and buying video from us. So adding AI to that is very easy compared to, and nothing's easy in these businesses, but that is easier than taking an awesome whiz-bang feature and trying to build distribution for it. So I think that we sit in a really interesting position as it relates to AI from the size of our platform, self-serve all the way up to enterprise, and now it's a question of how do we add in those features in an effective way, and also in a cost-effective way? So AI is very expensive, you know, if you just let it roll. So say you say, "Okay, translate all my videos into X number of languages," and you just let that run, that costs a fair amount, right? So we need to find good vehicles to get people to pay up for those features they really want, and for us to make sure we haven't, like, created a feature that causes us to have huge expense and crushes our margins as a result. Okay, so there are plans to embed AI features or tools into- Yeah, and it'll, you know, there'll be AI, in my view, across a lot of Vimeo products. You already can use AI across a lot of places and certain different features, but I think in terms of the heavy use, it'll probably be higher end, where the customers can afford it, and we can charge up for it. Okay. Are you using AI tools internally, like within the company? Yeah. We are increasingly using AI inside the company. I am still desperate, looking for more and more finance-oriented AI tools. When you think about doing finance right and doing controls right, for example, human error is, like, one of the biggest places you have stumbles when you do audits. Like, getting as much checks, double checks, sort of helping humans be better at what they do is a big place. There's a bunch of cool agent technology that we are already using inside our finance team, but I'm always looking for more. I sort of joke a little bit with folks that, you know, I kind of want a lights-out factory. So the more time my team spends creating the report, the less time they spend looking at what that report actually means for the company? So getting some of that work out of the system, getting people to thinking, analyzing, understanding, and making decisions is really where it's at. And there are good, increasingly great technologies there, but I think we can go a lot further, both at Vimeo and in the, you know, world at large. Yeah. Which areas within the company are using AI the most? So, finance is using it. The technology team is increasingly using it. The sales team is not using it so much as I can think of right now, though I do think they might have some automations on the Salesforce side. HR, I don't believe is using it too much yet, but that's because the HR data comes into finance, and we use it on the finance side to take that HR data and make it into financials. So- Okay. You know, it's in the G&A function, still early days. Okay. Now moving on to capital allocation. You mentioned making reinvestments and incremental revenue and profit growth opportunities. Could you provide some more color on that? Yeah. So on our last earnings call, we talked about how we were actually very delighted with our Q1 results. We did better on the top line than we had expected and guided. We did meaningfully better on the EBITDA line. We've really done important work at the company to get more profitable. Two years ago, I joined and immediately reported our Q1. We lost $10 million in EBITDA that quarter. Last quarter, we made $13 million positive. We've really changed fundamentally the profit profile of Vimeo. What we haven't changed fundamentally is the growth profile of Vimeo. We are still looking at revenue declines of the company, and when we look at creating shareholder value, what's been very clear to us from the street is that we've got to grow the business to really be able to go create that value, and we wanna do it responsibly. So now that we have the business at a place where we really are much more stable than we were in terms of financial stability, now we think we should go opportunistically take some of that capital, some of that upside, and put it back into the business to drive growth. We might even... If we see really big opportunity, we might take more than just what we see in terms of incremental. We are committed to being profitable. This is a really great business, but we do think with a new CEO, with really having taken two years to kind of do a lot of fundamental work to get to a better footing from a profitability, inherent profitability perspective, that now is the time to go make some strategic investments, and so we will be doing that. Oh, yeah, and you mentioned that you wanted to start buying back some stock. Is this a 2024 event or later on? Yeah. What we talked about on the call as well, is that we want to offset our dilution from our employee grants, and that we would be, starting to be out in the market to buy back stock for that. Okay. So yeah, that is on our minds as well. The company has a strong cash balance that gives us a lot of flexibility in terms of what we do, and I think we're trying to be measured in terms of how, how we use that, when we use that, and what, what it does for Vimeo. When do you think the relative softness in self-serve and add-ons will fade? I don't guide out several years, so- Yeah ... it's not what I've guided for this year. I think there's fundamental work going on to get that, product more stable and hopefully growing, while we also continue to be in a really strong growth position on Vimeo Enterprise. So, stay tuned on it. We're absolutely on it. We continue to believe that business can be a growth business. We've been disappointed that it's taken longer than we would've hoped to get there, but we feel like we've moved past the pandemic now, and now it is really about continuing to push the product forward. One thing that is a headwind on that, that we is self-inflicted on purpose this year and strategically, is that we, like many other companies out there, this year decided to really pull back on paid marketing, and kind of in a dramatic fashion. So we've pulled back very meaningfully on that, and it certainly is having some headwind on that business. Hard to know exactly how much. Our pullback in paid marketing is far greater than the decline we've seen in either new bookings or total bookings in self-serve. So we think that we're getting the inefficient spend off the table. And I think that's a really important piece. There's a little bit of an additional headwind there. So it's the business, you know, is probably being a little impacted by what we're doing, which we think is long-term healthy for the business. Mm-hmm. But in addition, we continue to believe we've gotta keep putting out products that delight customers, keep getting more people to pay attention, and then the video business itself is quite compelling, and that can help us grow. Okay, that's actually a great segue to my next question. You're reducing advertising spend in 2024 after you reduced it 21% in 2023, and 12% in 2022. Do you think a shift to product-led growth is enough to rejuvenate growth? I do think that there's a role for paid advertising. So we are not of the school of, like, just get rid of paid advertising, and all will be fine. We actually do think there's a role for it. But we do think near term, that emphasizing the product and getting the product to really do the selling for us- Mm-hmm ... is an important place to get to, an important muscle to exercise. Once you have that going, then applying marketing dollars to that is far more efficient, and so that's kind of the transition you're seeing us do. I don't believe that we'll be able to grow Vimeo just on product itself. We're gonna need a good sales team, especially at the higher end. We do need to have smart marketing out there. We just don't need to spend at the inefficient rates we were spending at before. And we decided, given where the company is, the transitions we've been making in management, that this was the year to just go pull it back and get to a more efficient place. Yeah. What are some other initiatives to boost customers and their wallet share? So much of it's around products. Much of it is focused on making sure that when we take a basket of products, it really resonates for the customer. So particularly at the high end, it is about making sure that as our sales team and our marketing materials talk to a specific use case, because we are smaller, really, in the realm of things, so the use cases matter a lot. We really need to have you say, "Okay, I'm a marketer that needs to use video." Well, Vimeo is an obvious answer for that me. Mm-hmm. Okay? So we really are trying to talk to the people relative to the use cases they have, and so shift a bit how we're making sure that when you hear about us, it's not just: "Oh, wait, Vimeo is that cool company I knew about. I think it's really interesting, but it's actually something I can imagine using, buying, et cetera." And I think that's gonna be true for the long tail of the business as well. And really just making sure we're understanding who the users are and sort of tailoring our message to those folks as well. Okay. As- We are just continue to put out great features, great functions- Mm-hmm ... AI, all that good stuff. As we've kind of discussed, your adjusted EBITDA margins have been making good progress. You hit 12% in Q1 with an implied 9% for the 2024 guide. Where do you see remaining levers to further improve profitability? That's inherent in the strategy to invest is not to do that. Mm-hmm. So I wanna be really clear. We're very clear with our guidance. We like to be very upfront about this. Q1 had a really good EBITDA result, but we are going to invest incremental dollars to get the company back to a growth position. Our guidance implies that revenue will come down in 2020... What year we are? 2024. And so if you're making those investments and that's happening, you're going to have a squeeze on the margins. Mm-hmm. But that is an investment in the future of Vimeo. Ultimately, we think Vimeo can have higher margins, but we do believe it is worth it to make some investments near term, which will put some pressure on margin to get us where we wanna go from here. And especially with a new CEO, a much more cleaned up business, I think we've got a lot of opportunity to do some really interesting things here. And I think our perspective is that will create more shareholder value than just continue to squeeze, squeeze, squeeze the business down for margin right here, right now. Okay, I think we have time for one or two more questions. But with your 2024 rev growth guided to decline, when do you expect growth to stabilize, and what will be the drivers to return to growth? So we don't guide years out, so I'm not gonna do that. But, the way we think about it is, first and foremost, we've got to keep growing Vimeo Enterprise and get it to be a bigger and bigger piece of the business. The opposite of that is that we have a portion of our business, about 10% of bookings and a bit more than that of revenue, we call Other, and that is, a product called OTT, which has been a business that is really sort of an interesting, a Netflix-in-a-box business. And then it, it also has in it a bunch of product, companies we bought. We've been running off the revenue from the acquisitions. OTT will be largely what is left there. Strategically, our focus is more on the Vimeo Enterprise and then the self-serve, which I'll address in a sec. On Other, we kind of are trying to get that small enough that even if it doesn't grow, it's not gonna really be a meaningful headwind. Then in the middle, you have our self-serve business, and the path to growth and the speed with which we get to growth will be all about when can we stabilize that business and get it to growth by both getting to a place where subs are either growing or just not declining too much, and we're continuing to bring up ARPUs as we add more value. Self-serve, even as flat, paired with that Vimeo Enterprise growth, gives us a growth business, and there's a bunch of different combinations that get you there. Really, as we think about the business, the speed back to overall growth for Vimeo is very much dependent on those two items: keeping Vimeo Enterprise growing, and then at what pace and speed and what health do we get the self-serve business either stable or growing? Okay, well, we're up on time. Thank you very much for speaking with us. I appreciate it. Thank you very much. Thanks, everyone. Thank you, guys.