Platform+ net revenue increased 22%
year-over-year (YoY) to $156.2 million
Platform+ gross profit increased 26% YoY to
$99.8 million
SmartCast Average Revenue Per User increased
14% YoY to $31.55
VIZIO Holding Corp. (NYSE: VZIO) today announced
the following results for the three months ended September 30,
2023:
Financial and operational highlights include the following,
compared to Q3'22:
- Net revenue of $426.2 million, compared to $435.0 million
- Platform+ net revenue of $156.2 million, up 22%
- Gross profit of $96.5 million, up 20%
- Platform+ gross profit of $99.8 million, up 26%
- Net income of $13.8 million, up 590%
- Adjusted EBITDA1 of $26.9 million, up 61%
- SmartCast Average Revenue Per User (ARPU) of $31.55, up
14%
“At VIZIO, we continue to invest in delivering the best possible
experience for our users and partners alike. Over the past few
years, we have been continuously retooling and enhancing our
operating system to unlock further growth opportunities,” said
William Wang, CEO of VIZIO. “While these efforts not only
successfully drove record ARPU in Q3, but they are also opening up
additional strategic options as well. Today, we are excited to
announce that we are beginning to explore partnerships with other
TV OEMs looking for alternatives within the CTV market. Our deep
expertise with integrated hardware and software provides a distinct
potential for mutually beneficial outcomes for VIZIO and future
partners.”
Q3'23 Business highlights include:
- Reached 17.9 million SmartCast Active Accounts, which streamed
5.2 billion hours
- Grew average SmartCast Hours per SmartCast Active Account to 97
per month, up 12% YoY
- Expanded our direct ad relationships by 20% compared to Q3'22,
adding 66 net new advertisers in Q3'232
- Rolled out an all-new quantum 4K QLED Smart TV in 65” ($499)
and 75” ($699) online and at major retailers including Walmart and
Sam’s Club
- Added WatchFree+ channels including Golf Nation, Celebrating
Hispanic Heritage, Cheaters, and getTV bringing the total number of
FAST channels to 290
- Launched 9 new apps including ESPN, Pet Collective, Black
Voices+, and Local BTV, bringing the total number of built-in apps
to almost 200
- Hosted the 2nd Annual VIZIO Developer Conference, a program
created to help developers and content partners build apps and
experiences for VIZIO Smart TVs
- Exclusive CTV partner of the Intuit SMB Media Labs business,
unlocking both B2B budgets, and a new wave of retail media network
partnerships for VIZIO
Selected Quarterly Financial
Results
(Unaudited, in millions, except
percentages and SmartCast ARPU)
Three Months Ended
September 30,
2023
2022
% Change
Financial
Highlights
Net Revenue
Device
$
270.0
$
307.0
(12
)%
Platform+
156.2
128.0
22
%
Total Net Revenue
426.2
435.0
(2
)%
Gross Profit
Device
(3.3
)
1.2
NM
Platform+
99.8
78.9
26
%
Total Gross Profit
96.5
80.1
20
%
Operating Expenses
83.8
75.4
11
%
Net Income
$
13.8
$
2.0
590
%
Adjusted EBITDA1
$
26.9
$
16.7
61
%
Operational
Metrics
Smart TV Shipments
1.1
1.2
(8
)%
SmartCast Active Accounts (as of)
17.9
16.6
8
%
Total VIZIO Hours
8,913
8,129
10
%
SmartCast Hours
5,153
4,243
21
%
SmartCast ARPU
$
31.55
$
27.69
14
%
1 A reconciliation of Net Income
(Loss) to Adjusted EBITDA is provided below.
2 Direct advertising
relationships consists of the number of advertisers that purchased
advertising inventory directly from VIZIO during the third quarter.
Net new advertisers for the quarter is calculated as the difference
between the number of direct advertising relationships during the
third quarter of 2023 versus the third quarter of 2022.
NM-Not Meaningful
Financial Outlook
(In millions)
Fourth Quarter
2023
Platform+ Net Revenue
$162 - $167
Platform+ Gross Profit
$97 - $103
Adjusted EBITDA
$7 - $16
Virtual Investor Event – Thursday, November 9, 2023
VIZIO management will hold a live question and answer
webcast at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to
discuss VIZIO's quarterly results and outlook. To listen to the
live webcast and replay, please visit VIZIO's Investor Relations
website (investors.vizio.com). The replay will be available through
January 1, 2024 at 11:59 p.m. (ET).
About VIZIO
Founded and headquartered in Orange County, California, our
mission at VIZIO Holding Corp. (NYSE: VZIO) is to deliver immersive
entertainment and compelling lifestyle enhancements that make our
products the center of the connected home. We are driving the
future of televisions through our integrated platform of
cutting-edge Smart TVs and powerful operating system. We also offer
a portfolio of innovative sound bars that deliver consumers an
elevated audio experience. Our platform gives content providers
more ways to distribute their content and advertisers more tools to
connect with the right audience.
Supplemental Financial and Other Information
Supplemental financial and other information can be accessed
through our Investor Relations website at investors.vizio.com. We
announce material information to the public about our company,
products and services, and other matters through a variety of
means, including filings with the Securities and Exchange
Commission, press releases, public conference calls, webcasts, our
Investor Relations website (investors.vizio.com), our blog
(accessible via vizio.com/en/newsroom) and our X account (@VIZIO)
in order to achieve broad, non-exclusionary distribution of
information to the public and for complying with our disclosure
obligations under Regulation FD.
Key Operational and Financial Metrics
We review certain key operational and financial metrics to
evaluate our business, measure our performance, identify trends
affecting our business, formulate business plans and make strategic
decisions. We regularly review and may adjust our processes for
calculating our internal metrics to improve their accuracy.
The metrics included in this press release and the accompanying
call, including the key operational and financial metrics defined
below, as well as SmartCast Hours per SmartCast Active Account,
direct advertising client relationships and net new advertisers,
are not based on any standardized industry methodology and are not
necessarily calculated in the same manner or comparable to
similarly titled measures presented by other companies. Similarly,
these metrics may differ from estimates published by third parties
or from similarly titled metrics of our competitors due to
differences in methodology. The numbers that we use to calculate
these metrics are based on internal data. While these numbers are
based on what we believe to be reasonable judgments and estimates
for the applicable period of measurement, there are inherent
challenges in measuring usage and engagement. We regularly review
and may adjust our processes for calculating our internal metrics
to improve their accuracy.
Smart TV Shipments. We define Smart TV Shipments as the
number of Smart TV units shipped to retailers or direct to
consumers in a given period. Smart TV Shipments currently drive the
majority of our revenue and provide the foundation for increased
adoption of our SmartCast operating system and the growth of our
Platform+ revenue. The growth rate between Smart TV Shipments and
Device net revenue is not directly correlated because VIZIO’s
Device net revenue can be impacted by other variables, such as the
series and sizes of Smart TVs sold during the period, the
introduction of new products as well as the number of sound bars
shipped.
SmartCast Active Accounts. We define SmartCast Active
Accounts as the number of VIZIO Smart TVs where a user has
activated the SmartCast operating system through an internet
connection at least once in the past 30 days. We believe that the
number of SmartCast Active Accounts is an important metric to
measure the size of our engaged user base, the attractiveness and
usability of our operating system, and subsequent monetization
opportunities to increase our Platform+ net revenue.
Total VIZIO Hours. We define Total VIZIO Hours as the
aggregate amount of time users spend utilizing our Smart TVs in any
capacity. We believe this usage metric is useful to understanding
our total potential monetization opportunities.
SmartCast Hours. We define SmartCast Hours as the
aggregate amount of time viewers engage with our SmartCast platform
to stream content or access other applications. This metric
reflects the size of the audience engaged with our operating system
as well as indicates the growth and awareness of our platform. It
is also a measure of the success of our offerings in addressing
increased user demand for OTT streaming. Greater user engagement
translates into increased revenue opportunities as we earn a
significant portion of our Platform+ net revenue through
advertising, which is influenced by the amount of time users spend
on our platform.
SmartCast ARPU. We define SmartCast ARPU as total
Platform+ net revenue, less revenue attributable to legacy VIZIO
V.I.A. Plus units, during the preceding four quarters divided by
the average of (i) the number of SmartCast Active Accounts at the
end of the current period; and (ii) the number of SmartCast Active
Accounts at the end of the corresponding prior year period.
SmartCast ARPU indicates the level at which we are monetizing our
SmartCast Active Account user base. Growth in SmartCast ARPU is
driven significantly by our ability to add users to our platform
and our ability to monetize those users.
Device gross profit. We define Device gross profit as
Device net revenue less Device cost of goods sold in a given
period. Device gross profit is directly influenced by consumer
demand, device offerings, and our ability to maintain a
cost-efficient supply chain.
Platform+ gross profit. We define Platform+ gross profit
as Platform+ net revenue less Platform+ cost of goods sold in a
given period. As we continue to grow and scale our business, we
expect Platform+ gross profit to increase over the long term.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance
with generally accepted accounting principles in the United States
of America, or GAAP, VIZIO considers certain financial measures
that are not prepared in accordance with GAAP, including Adjusted
EBITDA. We define Adjusted EBITDA as total net income (loss) before
interest income, net, other (expense) income, net, provision for
income taxes, depreciation and amortization and share-based
compensation. We consider Adjusted EBITDA to be an important metric
to assess our operating performance and help us to manage our
working capital needs. Utilizing Adjusted EBITDA, we can identify
and evaluate trends in our business as well as provide investors
with consistency and comparability to facilitate period-to-period
comparisons of our business. We believe that providing users with
non-GAAP measures such as Adjusted EBITDA may assist investors in
seeing VIZIO’s operating results through the eyes of management and
in comparing VIZIO’s operating results over multiple periods with
other companies in our industry.
We use Adjusted EBITDA in conjunction with net income (loss) as
part of our overall assessment of our operating performance and the
management of our working capital needs. Our definition of Adjusted
EBITDA may differ from the definition used by other companies and
therefore comparability may be limited. In addition, other
companies may not publish Adjusted EBITDA or similar metrics.
Furthermore, Adjusted EBITDA has certain limitations in that it
does not include the impact of certain expenses that are reflected
in our condensed consolidated statement of operations that are
necessary to run our business. Thus, Adjusted EBITDA should be
considered in addition to, not as a substitute for, or in isolation
from, measures prepared in accordance with GAAP, including net
income (loss).
We compensate for these limitations by providing a
reconciliation of Adjusted EBITDA to net income (loss). We
encourage investors and others to review our financial information
in its entirety, not to rely on any single financial measure and to
view Adjusted EBITDA in conjunction with net income (loss).
Forward-looking information
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements generally relate to future events or VIZIO’s future
financial or operating performance. In some cases, you can identify
forward looking statements because they contain words such as
“may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going
to,” “could,” “intends,” “target,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential,” or “continue,” or
the negative of these words or other similar terms or expressions
that concern our expectations, strategy, priorities, plans, or
intentions.
Forward-looking statements in this press release include, but
are not limited to, statements regarding VIZIO’s future financial
and operating performance, including our outlook and guidance, our
expectations regarding advertising sales, including the amount of
advertising spend we expect to realize from our partnerships. Our
expectations and beliefs regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties, including changes in our plans or
assumptions, that could cause actual results to differ materially
from those projected. These risks include the possibility that: we
are not able to keep pace with technological advances in our
industry and successfully compete in highly competitive markets; we
pursue technologies that do not become commercially accepted,
consumers may not buy our devices, and TV OEMs may not adopt our
technologies; we do not have the ability to continue to increase
the sales of our Smart TVs; we cannot attract and maintain
SmartCast Active Accounts; we cannot increase SmartCast Hours; we
are not able to attract and maintain popular content on our
platform; we are not able to maintain relationships with
advertisers; we cannot adapt to market conditions and technological
developments, including with respect to our platform's
compatibility with applications developed by content providers; and
an economic downturn or economic uncertainty adversely affects
consumer discretionary spending and advertising.
The forward-looking statements contained in this press release
are also subject to other risks and uncertainties, including those
more fully described in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for
the year ended December 31, 2022, as filed on March 1, 2023, and
our Quarterly Reports on Form 10-Q for the quarter ended March 31,
2023, as filed on May 9, 2023, and for the quarter ended June 30,
2023, as filed on August 8, 2023. Additional information will also
be set forth in our Quarterly Report on Form 10-Q for the three and
nine months ended September 30, 2023. The forward-looking
statements in this press release are based on information available
to VIZIO as of the date hereof, and VIZIO disclaims any obligation
to update any forward-looking statements, except as required by
law.
VIZIO HOLDING CORP.
Consolidated Statements of
Operations
(Unaudited, in millions except
per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net revenue:
Device
$
270.0
$
307.0
$
753.4
$
987.9
Platform+
156.2
128.0
423.9
341.4
Total net revenue
426.2
435.0
1,177.3
1,329.3
Cost of goods sold:
Device
273.3
305.8
754.7
974.8
Platform+
56.4
49.1
164.5
127.7
Total cost of goods sold
329.7
354.9
919.2
1,102.5
Gross profit:
Device
(3.3
)
1.2
(1.3
)
13.1
Platform+
99.8
78.9
259.4
213.7
Total gross profit
96.5
80.1
258.1
226.8
Operating expenses:
Selling, general and administrative
63.6
54.8
180.4
167.5
Marketing
9.2
8.8
26.9
31.3
Research and development
9.8
10.8
31.7
29.4
Depreciation and amortization
1.2
1.0
3.3
2.8
Total operating expenses
83.8
75.4
242.3
231.0
Income (loss) from operations
12.7
4.7
15.8
(4.2
)
Interest income, net
3.5
0.4
9.0
0.4
Other (expense) income, net
(0.1
)
0.1
0.1
(0.6
)
Total non-operating income (expense),
net
3.4
0.5
9.1
(0.2
)
Income (loss) before income taxes
16.1
5.2
24.9
(4.4
)
Provision for income taxes
2.3
3.2
9.9
2.3
Net income (loss)
$
13.8
$
2.0
$
15.0
$
(6.7
)
Net income (loss) per share attributable
to Class A and Class B stockholders:
Basic
$
0.07
$
0.01
$
0.08
$
(0.03
)
Diluted
$
0.07
$
0.01
$
0.08
$
(0.03
)
Weighted-average Class A and Class B
common shares outstanding:
Basic
196.7
193.8
196.0
192.6
Diluted
199.9
200.2
200.2
192.6
VIZIO HOLDING CORP.
Consolidated Balance
Sheets
(Unaudited, in millions except
par values)
September 30,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
215.5
$
288.7
Short-term investments
119.4
58.9
Accounts receivable, net
345.6
357.9
Other receivables due from related
parties
—
2.2
Inventories
17.6
15.5
Income tax receivable
—
1.7
Prepaid and other current assets
54.4
53.5
Total current assets
752.5
778.4
Property, equipment and software, net
19.9
19.9
Goodwill
44.8
44.8
Deferred income taxes
51.2
51.2
Other assets
38.4
21.4
Total assets
$
906.8
$
915.7
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable due to related
parties
$
104.5
$
148.2
Accounts payable
137.3
117.2
Accrued expenses
175.8
204.9
Accrued royalties
40.8
47.4
Income taxes payable
1.0
—
Other current liabilities
6.7
5.5
Total current liabilities
466.1
523.2
Other long-term liabilities
19.2
18.8
Total liabilities
485.3
542.0
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100.0
shares authorized and no shares issued and outstanding as of
September 30, 2023 and December 31, 2022
—
—
Common stock, $0.0001 par value; 1,350.0
shares authorized as of September 30, 2023 and December 31,
2022
- Class A, 124.8 and 121.9 shares issued and 121.0 and 118.1
shares outstanding as of September 30, 2023 and December 31, 2022,
respectively,
- Class B, 76.2 and 76.8 shares issued and 76.2 and 76.8 shares
outstanding as of September 30, 2023 and December 31, 2022,
respectively, and
- Class C, no shares issued and outstanding as of September 30,
2023 and December 31, 2022.
—
—
Additional paid-in capital
399.8
366.9
Accumulated other comprehensive loss
(0.4
)
(0.3
)
Retained earnings
22.1
7.1
Total stockholders’ equity
421.5
373.7
Total liabilities and stockholders’
equity
$
906.8
$
915.7
VIZIO HOLDING CORP.
Consolidated Statements of
Cash Flows
(Unaudited, in millions)
Nine Months Ended September
30,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
15.0
$
(6.7
)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities:
Depreciation and amortization
5.6
2.8
Amortization of premium and discount on
investments
(3.3
)
(0.3
)
Change in fair value of investment
securities
—
0.7
Deferred income taxes
—
(0.2
)
Share-based compensation expense
30.4
34.0
Change in allowance for doubtful
accounts
0.9
(0.1
)
Changes in operating assets and
liabilities:
Accounts receivable
11.4
35.5
Other receivables due from related
parties
2.2
4.3
Inventories
(2.1
)
(22.2
)
Income taxes receivable
1.7
(2.9
)
Prepaid and other current assets
(3.7
)
29.0
Other assets
(15.5
)
(4.3
)
Accounts payable due to related
parties
(43.7
)
(58.5
)
Accounts payable
19.4
(3.5
)
Accrued expenses
(29.4
)
6.8
Accrued royalties
(6.6
)
(13.1
)
Income taxes payable
1.0
—
Other current liabilities
1.2
0.3
Other long-term liabilities
0.4
6.2
Net cash (used in) provided by operating
activities
(15.1
)
7.8
Cash flows from investing activities:
Purchase of property and equipment
(2.0
)
(11.7
)
Purchase of investments
(164.5
)
(60.5
)
Maturity of investments
105.9
—
Net cash used in investing activities
(60.6
)
(72.2
)
Cash flows from financing activities:
Proceeds from the exercise of stock
options
1.9
10.7
Withholding taxes paid on behalf of
employees on net settled share-based awards
(0.6
)
(12.0
)
Proceeds from sale of stock under ESPP
1.2
—
Net cash provided by (used in) financing
activities
2.5
(1.3
)
Effects of exchange rate changes on cash
and cash equivalents
—
—
Net decrease in cash and cash
equivalents
(73.2
)
(65.7
)
Cash and cash equivalents at beginning of
period
288.7
331.6
Cash and cash equivalents at end of
period
$
215.5
$
265.9
Supplemental disclosure of cash flow
information:
Cash paid for income taxes
$
5.1
$
4.2
Cash paid for interest
$
0.1
$
0.2
Cash paid for amounts included in the
measurement of operating lease liabilities
$
3.3
$
2.5
Supplemental disclosure of non-cash
investing and financing activities:
Right-of-use assets obtained in exchange
for new operating lease liabilities
$
1.8
$
6.1
Additions to property and equipment
financed by accounts payable
$
0.7
$
—
VIZIO HOLDING CORP.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(Unaudited, in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss)
$
13.8
$
2.0
$
15.0
$
(6.7
)
Adjusted to exclude the following:
Interest income, net
(3.5
)
(0.4
)
(9.0
)
(0.4
)
Other (expense) income, net
0.1
(0.1
)
(0.1
)
0.6
Provision for income taxes
2.3
3.2
9.9
2.3
Depreciation and amortization
1.9
1.0
5.6
2.8
Share-based compensation
12.3
11.0
30.4
34.0
Adjusted EBITDA
$
26.9
$
16.7
$
51.8
$
32.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109905415/en/
Investors and Analysts: Michael Marks IR@vizio.com
Media: PR@vizio.com
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