IAC/InterActiveCorp : Vimeo Reports Q1 2021 Results

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VIMEO REPORTS Q1 2021 - Q1 REVENUE INCREASES 57% TO $89 MILLION Vimeo expected to begin trading as an independent public company on May 25, 2021

NEW YORK- May 5, 2021-Vimeo released its first quarter results today. Monthly metrics for Vimeo through April 2021 are included on page 2 of this release. A letter to IAC shareholders from IAC CEO Joey Levin will be posted after the close of market trading on Thursday, May 6, 2021 on the Investor Relations section of IAC's website at ir.iac.com.

IAC shareholders are expected to meet on May 14, 2021 to vote on the proposal to effect the Spin-off of Vimeo. If approved, we expect post-spin Vimeo to begin trading on Nasdaq (ticker symbol "VMEO") on May 25, 2021, after trading on a "when-issued" basis on May 18th through May 24th.

"We are witnessing the rapid proliferation of video into every aspect of business communication. The past year has seen a clear acceleration of demand from organizations looking to leverage professional-quality video in their digital transformation," said Anjali Sud, Chief Executive Officer of Vimeo. "Vimeo was built to solve this. We had a record quarter with accelerating revenue growth, expanding gross margins and profitability, and we continued to deliver momentum within the enterprise, with enterprise revenue up more than 100% year-over-year. Looking ahead, our focus remains on product innovation to enable every business to use video with tools that are far easier, more powerful and more cost effective than ever before."

VIMEO, INC. SUMMARY RESULTS

($ in millions except per share amounts)

Q1 2021 Q1 2020 Growth

Revenue	$ 89.4	$	57.0	57%
Gross profit	64.5		38.6	67%
Gross margin	72%		68%
Operating loss (a)	(5.6)		(17.2)	67%
Net earnings (loss)	3.3		(20.3)	NM
Diluted EPS	0.02		(0.14)	NM
Adjusted EBITDA (a)	1.3		(12.0)	NM

See reconciliation of GAAP to non-GAAP measure beginning on page 7.

1. Operating loss and Adjusted EBITDA will not agree to the IAC financial segment information in IAC's earnings release due to the allocation to Vimeo of certain IAC corporate expenses as required by the Securities and Exchange Commission for standalone reporting purposes.

Q1 2021 HIGHLIGHTS

• Revenue increased 57% (accelerating from 54% in Q4 2020) driven by: o 25% subscriber growth to nearly 1.6 million
  o 27% ARPU growth to a record high of $233
• Enterprise revenue increased over 100% for the third consecutive quarter and Enterprise net revenue retention was greater than 110% for the third consecutive quarter.
• New Enterprise customers and customers who expanded their relationship during the first quarter include Intuit, Softbank, Spotify, Amazon, SAP, Comcast, San Antonio Spurs, University of Florida and The New York Times.
• Launched new products including lead generation tools for marketers, video GIFs for email, live auto closed captions and native integrations with top marketing software platforms Mailchimp, HubSpot and Constant Contact.

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Monthly Trends (year-over-year growth trends) (a)

	Jan '21	Feb '21	Mar '21	Apr '21
Revenue	57%	54%	60%	46%
Subscribers	25%	26%	25%	21%
Average Revenue per User ("ARPU")	26%	27%	27%	19%

1. As of the date of this document, the Company has not yet completed its financial close process for April 2021. As a result, the information herein for April 2021 is preliminary and based upon information available to the Company as of the date of this document. During the course of the financial close process, the Company may identify items that would require it to make adjustments, which may impact growth rates and be material to the information presented above.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2021:

• Vimeo had 159.1 million Class A and Class B common shares outstanding, 139.8 million of which were held by IAC.
• Vimeo held $316 million in cash and cash equivalents and no debt.

If the Spin-off is completed, IAC shareholders will receive 1.6235 shares of common stock for each IAC share held at the completion of the anticipated Spin-off.

Vimeo raised $300 million of primary equity in January 2021 in two tranches, one raise of $200 million at a $5.2 billion pre-money valuation and a second raise of $100 million at a $5.7 billion pre-money-valuation. This followed a $150 million equity raise in November 2020.

Vimeo entered into a $100 million revolving credit facility on February 12, 2021. As of March 31, 2021, it had no borrowings and currently has no borrowings.

VIDEO CONFERENCE CALL

Vimeo will live stream a video conference to answer questions regarding its first quarter results on Thursday, May 6, 2021, at 8:30 a.m. Eastern Time. This live stream will include the disclosure of certain information, including forward-looking information, which may be material to an investor's understanding of Vimeo's business. The live stream will be open to the

public athttps://vimeo.com/investors/q1-earnings-2021.

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ESTIMATED DILUTIVE SECURITIES

The information in the table below shows post-spin Vimeo's shares outstanding and various dilutive securities, assuming that the Spin-off and the merger of Vimeo, Inc. with a subsidiary of Vimeo Holdings, Inc. (which will be renamed Vimeo, Inc.) have occurred. In connection with the Spin-off, certain IAC equity awards will be converted into IAC and Vimeo equity awards. In connection with the merger, Vimeo equity awards will be adjusted based on the Vimeo merger exchange ratio. These dilutive securities are reflected below at their assumed adjusted amounts.

			Avg.
			Exercise
	Shares		Price
	(shares in millions; rounding
	differences may occur)
Vimeo shares held by IAC shareholders (a)	139.8
Vimeo shares held by third-party investors (b)	19.5
Basic Shares as of 4/30/21	159.4
Stock appreciation rights (b) and stock options (c) - vested	11.5	$	4.13
Total vested dilutive securities	11.5
Stock appreciation rights - unvested (b)	8.5	$	7.01
RSUs (b) and restricted stock (c)	6.7
Total unvested dilutive securities	15.2
Total Dilutive Securities at 4/30/21	26.7

(a) Vimeo shares currently by IAC shareholders in connection with the Spin-off.

(b) Reflects the Vimeo merger exchange ratio of 1.0152 as of April 5, 2021.

(c) Reflects the Vimeo Spin-off exchange ratio of 1.6235.

The Vimeo merger exchange ratio is an estimate as of April 5, 2021. The final ratio will be determined on the date the Spin-off is completed.

For the definition of "Vimeo merger exchange ratio" and "Vimeo Spin-off exchange ratio" please refer to the Proxy Statement of IAC/InterActiveCorp, Prospectus of IAC/InterActiveCorp and of Vimeo Holdings, Inc. and Consent Solicitation Statement of Vimeo, Inc. filed with the Securities and Exchange Commission on April 8, 2021.

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GAAP FINANCIAL STATEMENTS

VIMEO, INC. CONSOLIDATED STATEMENT OF OPERATIONS ($ in thousands except per share data)

	Three Months Ended March 31,
	2021				2020
Revenue	$	89,422	$	56,968
Cost of revenue (exclusive of depreciation shown separately below)		24,956			18,358
Gross profit		64,466			38,610
Operating expenses:
Research and development expense		21,475			15,293
Sales and marketing expense		32,069			25,125
General and administrative expense		14,518			12,204
Depreciation		115			58
Amortization of intangibles		1,887			3,123
Total operating expenses		70,064			55,803
Operating loss		(5,598)			(17,193)
Interest expense		(64)			-
Interest expense-related party		(726)			(2,453)
Other income (expense), net		10,086			(59)
Earnings (loss) before income taxes		3,698			(19,705)
Income tax provision		(385)			(555)
Net earnings (loss) attributable to Class A Voting common stock and Class B Non-
Voting common stock shareholders	$	3,313	$	(20,260)
Per share information attributable to Class A Voting common stock and Class B Non-
Voting common stock shareholders:
Basic and diluted earnings (loss) per share	$	0.02	$	(0.14)
Stock-based compensation expense by function:
Cost of revenue	$	20	$	4
Research and development expense		1,720			460
Sales and marketing expense		322			157
General and administrative expense		2,850			1,395
Total stock-based compensation expense	$	4,912		$	2,016

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VIMEO, INC. CONSOLIDATED BALANCE SHEET
($ in thousands)
		March 31,			December 31,
		2021			2020
ASSETS
Cash and cash equivalents	$	316,305	$	110,011
Accounts receivable, net		14,121			12,785
Other current assets		11,335			7,932
Total current assets		341,761			130,728
Leasehold improvements and equipment, net		3,320			3,321
Goodwill		219,337			219,337
Intangible assets with definite lives, net		8,967			10,854
Other non-current assets		11,124			6,839
TOTAL ASSETS	$	584,509	$	371,079
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable, trade	$	2,797	$	3,324
Promissory note due on demand-related party		-			44,565
Deferred revenue		147,766			137,436
Accrued expenses and other current liabilities		40,102			47,432
Total current liabilities		190,665			232,757
Long-termdebt-related party		-			50,000
Other long-term liabilities		4,710			3,242
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Class A Voting common stock		928			837
Class B Non-Voting common stock		663			663
Preferred stock		-			-
Additional paid-in capital		667,348			366,676
Accumulated deficit		(279,696)			(283,009)
Accumulated other comprehensive loss		(109)			(87)
Total shareholders' equity		389,134			85,080
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	584,509		$	371,079