Vimeo, Inc.

Q4 2023 earnings Q&A session. I'm Jillian Munson, CFO, and I'm happy to be joined by Adam Gross, our interim CEO. You can find our Q4 23 shareholder letter and additional financial materials on our investor relations website. As a reminder, in this session, we will talk through some non-GAAP terms, and you can find the closest GAAP terms and reconciliations in our shareholder letter. Before we jump into Q&A, a few points on the quarter. In 2023, Vimeo made significant strides in improving profitability while also showing bookings, revenue, and some encouraging product metric improvements in the second half of the year. We delivered solid results in Q4 with revenue flat year-over-year, adjusted EBITDA of $13 million, and $10 million in free cash flow, ending the year with over $300 million in cash. As we look at our bookings, a couple key items stand out. Vimeo Enterprise continued its strong double-digit growth trajectory with net revenue retention of 103% and some impressive customer wins in the quarter. In self-serving add-ons, we saw some green shoots that our bet on product-led growth is the right one. Partially offsetting top of the funnel pressure, conversion and AOV improved. And most exciting for us, the team delivered retention improvements in all cohorts in the self-serve business and in aggregate. Looking ahead to 2024, we continue to believe that Vimeo has a lot of upside potential that's being masked by the post-pandemic market environment and our own proactive efforts to put Vimeo on better financial footing. We have been and are continuing to move to more efficient product-led growth with increased investment in R&D, improved go-to-market systems and processes, and an eye to cost containment, especially in advertising spend. When we net out the factors impacting our bookings and revenue, we expect they will both decline in 2024 as we work our way to a healthier Vimeo. At the same time, the strength of our business model remains evident. We believe that we can maintain adjusted EBITDA profitability in 2024, despite the impact of roughly $5 million in cash compensation substituted for equity grants. We are making strategic changes to the business that we believe will lay the foundation for healthier, more profitable growth in the future. And Adam and I are looking forward to talking with you today. With that, let's open up the line for your questions.

Our first question will come from Tom Champion at Piper Sandler. Tom?

Hey, thanks very much, and good afternoon. Maybe, Adam, to begin with you, so within Booking's clear progress on the enterprise side, I'm wondering if you could just talk about how you're thinking through uh self-serve and and the add-on segment just as as you manage to go forward and you know some of the push pull between kind of upper funnel um friction and um maybe improved retention maybe how are you thinking through um that part of the business and then uh maybe for jillian The letter talks about lower ad expense after reducing this line item in 22 and 23. How are you looking to further rationalize this? And why does that make sense given the top line implications? Thank you.