Vimeo stock jumped more than 7% after the video-sharing platform unexpectedly reported a profit for the third quarter.
For the three months ended September 30, 2023, it posted earnings of $8.5 million or $0.05 per share, an improvement from a loss of $21.4 million or a loss per share of $0.13 in the year-ago quarter.
Analysts had been expecting a loss per share of $0.06.
Vimeo’s 3Q revenue of $106 million also topped estimates of $101.12 million but was down 2% year-over-year.
Bookings grew 4% over the year-ago quarter to $100 million, growing for the first time in 2023.
“We have returned Vimeo to profitability, generating meaningful free cash flow,” interim CEO Adam Gross highlighted in a letter to shareholders.
“With our healthy gross margins, and our focus on cost control, I am confident we can create the additional investment dollars that may be needed to achieve predictable and sustained revenue growth in the years to come, even if that may impact margin in 2024.”
For the fourth quarter, Vimeo forecast revenue above $100 million, compared to the Street estimate of $103 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the high-single-digit millions of dollars.
However, it expects a year-over-year mid-single-digits decline in bookings for 4Q.
Vimeo shares were up 7.4% at US$3.60 in afterhours trade on Monday evening.
Contact the author at emily.jarvie@proactiveinvestors.com
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