Why Vimeo Stock Tanked Today

The video software company’s earnings came in below expectations. What happened Shares of Vimeo (NASDAQ:VMEO) were tumbling on Friday after the company reported disappointing second-quarter earnings. The recent spin-off from IAC/InterActivCorp was down as much as 17.1% on the news. As of 1:01 p.m. EDT, the stock was down 14.6%. So what Vimeo reported a second-quarter earnings per share loss of $0.13, which was worse than the $0.05 loss analysts were expecting. The company is also seeing a worsening trend in monthly subscriber and revenue growth. Vimeo’s revenue grew 46% year over year in April but has slowed every month since, hitting 35% year-over-year growth in July. Subscriber growth followed the same trend, going from 21% year-over-year growth in April down to 16% year-over-year growth in July.  Image source: Getty Images. On a more positive note, total revenue grew 43% year over year in Q2 to $96 million, while gross margin expanded from 66% to 73% during the period. Vimeo also generated $18 million in free cash flow in the quarter, meaning that while the company may show EPS losses according to generally accepted accounting principles (GAAP), the underlying business is still generating cash for shareholders. Enterprise revenue grew 80% in the…
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