vmeo-20220331

As filed with the Securities and Exchange Commission on May 5, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________

Commission File No. 001-40420

VIMEO, INC.

(Exact name of registrant as specified in its charter)


Delaware						85-4334195
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

555 West 18th Street, New York, New York 10011

(Address of registrant's principal executive offices)

(212) 314-7300

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Exchange on Which Registered
Common Stock, par value $0.01 per share	VMEO	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 29, 2022, the following shares of the registrant's common stock were outstanding:


Common Stock			156,888,379
Class B common stock			9,399,250
Total			166,287,629

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Consolidated Financial Statements	4
	Vimeo, Inc. and Subsidiaries
	Consolidated Balance Sheet	4
	Consolidated Statement of Operations	5
	Consolidated Statement of Comprehensive Operations	6
	Consolidated Statement of Shareholders' Equity	7
	Consolidated Statement of Cash Flows	9
	Note 1—Organization and Basis of Presentation	10
	Note 2—Revenue	12
	Note 3—Income Taxes	13
	Note 4 —Fair Value Measurements	14
	Note 5 —Revolving Credit Facility	16
	Note 6 —Shareholders' Equity	16
	Note 7 —Accumulated Other Comprehensive Loss	17

	Note 8 —(Loss ) Earnings Per Share	17

	Note 9 —Financial Statement Details	18
	Note 1 0 —Contingencies	19
	Note 1 1 —Related Party Transactions	22

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operation s for Vimeo	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	35
PART II
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 5.	Other Information	36
Item 6.	Exhibits	37
	Signatures	38

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "will," "may, "could," "should," "would," "anticipates," "estimates," "expects," "plans," "projects," "forecasts," "intends," "targets," "seeks" and "believes," as well as variations of these words, among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to Vimeo’s future results of operations and financial condition, business strategy, and plans and objectives of management for future operations.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions. Actual results could differ materially from those contained in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to:

•our limited operating history as a pure software-as-a-service (“SaaS”) company and our limited history of selling such plans on a sales-assisted basis,

•we have a history of losses,

•our prior rapid growth may not be indicative of future performance,

•our total addressable market may prove to be smaller than we expect,

•our ability to read data and make forecasts may be limited,

•we may need additional funding as we continue to invest in research and development and expand internationally,

•we may not have the right product/market fit,

•we may not be able to attract free users or paid subscribers,

•we may not be able to convert our free users into subscribers,

•competition in our market is intense,

•we may not be able to scale our business effectively,

•we may experience service interruptions,

•hosting and delivery costs may increase unexpectedly, our success depends on our ability to reach customers and acquire subscribers through digital app stores,

•our business involves hosting large quantities of user content,

•we may face liability for hosting a variety of tortious or unlawful materials,

•we collect, store and process large amounts of content and personal information and any loss of or unauthorized access to such data could materially impact our business,

•the impact of the COVID-19 pandemic on our business,

•we have been the target of cyberattacks by malicious actors, and

•the risks described in the section titled "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this report with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified by these cautionary statements.

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

VIMEO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


	March 31, 2022		December 31, 2021
	(In thousands, except par value amounts)
ASSETS
Cash and cash equivalents	$	291,100	$	321,900
Accounts receivable, net	34,638		29,451
Prepaid expenses and other current assets	16,626		18,811
Total current assets	342,364		370,162

Leasehold improvements and equipment, net	2,973		2,868
Goodwill	245,048		242,586
Intangible assets with definite lives, net	9,277		11,008
Other non-current assets	22,484		22,737
TOTAL ASSETS	$	622,146	$	649,361

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:

Accounts payable, trade	$	15,482	$	17,501

Deferred revenue	171,749		173,167
Accrued expenses and other current liabilities	65,499		67,385
Total current liabilities	252,730		258,053



Other long-term liabilities	11,368		20,713

Commitments and contingencies

SHAREHOLDERS' EQUITY:
Common stock, $0.01 par value; 1,600,000 shares authorized; 156,874 and 156,708 shares issued and outstanding, respectively	1,569		1,567
Class B common stock, $0.01 par value; 400,000 shares authorized; 9,399 shares issued and outstanding	94		94


Preferred stock, $0.01 par value; 100,000 shares authorized; no shares issued and outstanding	—		—
Additional paid-in-capital	718,951		704,796
Accumulated deficit	(362,334)		(335,776)
Accumulated other comprehensive loss	(232)		(86)
Total shareholders' equity	358,048		370,595
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	622,146	$	649,361

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

VIMEO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,
		2022		2021
		(In thousands, except per share data)
Revenue		$	108,354	$	89,422
Cost of revenue (exclusive of depreciation shown separately below)		26,756		24,956
Gross profit		81,598		64,466
Operating expenses:
Research and development expense		34,418		21,475
Sales and marketing expense		43,156		32,069
General and administrative expense		28,612		14,518
Depreciation		376		115
Amortization of intangibles		1,291		1,887
Total operating expenses		107,853		70,064
Operating loss		(26,255)		(5,598)
Interest expense		(121)		(64)
Interest expense–related party		—		(726)
Other income, net		341		10,086
(Loss) earnings before income taxes		(26,035)		3,698
Income tax provision		(523)		(385)
Net (loss) earnings		$	(26,558)	$	3,313

Per share information:
Basic and diluted (loss) earnings per share		$	(0.16)	$	0.02


Stock-based compensation expense by function:
Cost of revenue		$	164	$	20
Research and development expense		4,699		1,720
Sales and marketing expense		932		322
General and administrative expense		8,398		2,850
Total stock-based compensation expense		$	14,193	$	4,912

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

VIMEO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS

(Unaudited)


	Three Months Ended March 31,
		2022		2021
		(In thousands)
Net (loss) earnings		$	(26,558)	$	3,313
Other comprehensive loss:
Change in foreign currency translation		(146)		(22)
Total other comprehensive loss		(146)		(22)
Comprehensive (loss) income		$	(26,704)	$	3,291

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

VIMEO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three Months Ended March 31, 2022

(Unaudited)


	Common stock, $0.01 par value			Class B common stock, $0.01 par value			Additional Paid-in-Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss		Total Shareholders' Equity
	$		Shares	$		Shares
	(In thousands)













Balance at December 31, 2021	$	1,567	156,708	$	94	9,399			$	704,796	$	(335,776)	$	(86)	$	370,595
Net loss	—		—	—		—			—		(26,558)		—		(26,558)
Other comprehensive loss	—		—	—		—			—		—		(146)		(146)
Stock-based compensation expense	—		—	—		—			14,193		—		—		14,193
Amounts related to settlement of equity awards	2		166	—		—			(38)		—		—		(36)






Balance at March 31, 2022	$	1,569	156,874	$	94	9,399			$	718,951	$	(362,334)	$	(232)	$	358,048

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

VIMEO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Three Months Ended March 31, 2021

(Unaudited)


	Class A Voting common stock of Vimeo OpCo, $0.01 par value	Class B Non-Voting common stock of Vimeo OpCo, $0.01 par value			Additional Paid-in-Capital			Accumulated Deficit	Accumulated Other Comprehensive Loss		Total Shareholders' Equity
		$		Shares			$						Shares
		(In thousands)




















Balance at December 31, 2020		$	837	83,656	$	663		66,285	$	366,676	$	(283,009)		$	(87)	$	85,080
Net earnings		—		—	—			—	—		3,313			—		3,313
Other comprehensive loss		—		—

SEC Form 10-Q filed by Vimeo Inc.