Vimeo Faces Sharp Stock Drop After Mixed Earnings Report

NEW YORK, Feb. 20, 2025 — Vimeo‘s stock experienced a significant decline on Thursday, plummeting 20.9% by 1:25 p.m. ET following the release of its fourth-quarter earnings report. The video’s streaming company’s market cap is now approximately $914 million, with shares valued at $5.51, down $1.27 or 18.73% by market close.

Despite beating Wall Street’s revenue expectations, Vimeo’s profit fell short, fueling investor disappointment. The report revealed an earnings per share (EPS) of $0.01 on revenue of $103.16 million, slightly above the analysts’ forecast of $0.03 EPS on $100.59 million in revenue. However, this represents an 80% decrease in earnings year-over-year, down from $0.05 in the previous quarter.

Investors reacted negatively not only to the lower-than-expected profit but also to the company’s guidance for future growth. Revenue has declined by approximately 2% compared to the same period last year, raising concerns about Vimeo’s ability to recover its previous growth trajectory. The S&P 500 and Nasdaq Composite indices experienced a milder drop, down only 0.8%, highlighting the specific challenges facing Vimeo.

Vimeo management expressed intentions to boost investments to stimulate innovation and drive future revenue growth. The company expects low-single-digit sales growth in the early part of 2025, anticipating an uptick later in the year. Their Enterprise and over-the-top-and-streaming categories performed well, contributing to 34% of total sales.

Although the management has indicated some positive trends from recent price increases, they also acknowledge the huge challenges with profitability going forward. While the firm has highlighted solid growth in certain core products, investors remained cautious due to the substantial earnings drop and the need for increased investment to drive sales performance.

This mixed earnings report and the subsequent stock drop are indicative of investors’ tightening sentiments toward Vimeo, especially given the backdrop of a competitive streaming market. As Vimeo prepares to revitalize its sales approach, it remains to be seen how effectively the company can manage investor expectations and return to a path of profitability.