Platform+ net revenue increased 26%
year-over-year (YoY) to $197.0 million
Platform+ gross profit increased 16% YoY to
$115.8 million
SmartCast Average Revenue Per User increased
18% YoY to $37.17
VIZIO Holding Corp. (NYSE: VZIO) today announced
the following results for the three months ended September 30,
2024:
Financial and operational highlights include the following,
compared to Q3'23:
- Net revenue of $444.7 million, up 4%
- Platform+ net revenue of $197.0 million, up 26%
- Gross profit of $109.1 million, up 13%
- Platform+ gross profit of $115.8 million, up 16%
- Net income of $0.5 million, compared to $13.8 million
- Adjusted EBITDA1 of $8.8 million which includes
acquisition-related costs of $10.6 million and cash incentive
awards in lieu of equity awards of $3.1 million in connection with
our long-term incentive plan, compared to $26.9 million
- SmartCast Average Revenue Per User (ARPU) of $37.17, up
18%
Q3'24 Business highlights include:
- Reached 19.1 million SmartCast Active Accounts, which streamed
5.8 billion hours2
- Grew SmartCast Hours per average SmartCast Active Account to
101 per month, up 5% YoY
- Expanded our direct ad relationships by 20% compared to
Q3'233
- Unveiled the VIZIO Sports Zone, making it faster and easier for
sports fans to find and stream games directly from the home
screen
- Introduced WatchFree+ to the VIZIO mobile app, allowing users
to take their favorite channels wherever they go
- Extended the WatchFree+ offering with channels from Military
Heroes, Duck Dynasty, BBC Earth, and BritBox Mysteries
- Launched 26 new apps, including Lights Out Sports, Knight Time,
Victory+, and Spirits Network bringing the total number of built-in
apps to over 270
1
A reconciliation of Net Income (Loss) to
Adjusted EBITDA is provided below.
2
Streamed hours represent SmartCast
Hours.
3
Direct ad relationships consists of the
number of advertisers that purchased advertising inventory directly
from VIZIO during the third quarter.
Selected Quarterly Financial
Results
(Unaudited, in millions, except
percentages and SmartCast ARPU)
Three Months Ended
September 30,
2024
2023
% Change
Financial
Highlights
Net Revenue
Device
$
247.7
$
270.0
(8
)%
Platform+
197.0
156.2
26
%
Total Net Revenue
444.7
426.2
4
%
Gross Profit
Device
(6.7
)
(3.3
)
N
M
Platform+
115.8
99.8
16
%
Total Gross Profit
109.1
96.5
13
%
Operating Expenses1
114.7
83.8
37
%
Net Income
$
0.5
$
13.8
(96
)%
Adjusted EBITDA2,3
$
8.8
$
26.9
(67
)%
Operational
Metrics
Smart TV Shipments
1.0
1.1
(5
)%
SmartCast Active Accounts (as of)
19.1
17.9
7
%
Total VIZIO Hours
9,468
8,913
6
%
SmartCast Hours
5,771
5,153
12
%
SmartCast ARPU
$
37.17
$
31.55
18
%
_________________________
1 Operating expenses for the three months ended September 30, 2024
include share-based compensation of $10.6 million. Operating
expenses for the three months ended September 30, 2023 include
share-based compensation of $11.4 million. 2 A reconciliation of
Net Income (Loss) to Adjusted EBITDA is provided below. 3 2024
Adjusted EBITDA includes acquisition-related costs of $10.6 million
and cash incentive awards in lieu of equity awards of $3.1 million
in connection with our long-term incentive plan. NM-Not meaningful
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, including the key
operational and financial metrics defined below, as well as
SmartCast Hours per SmartCast Active Account and direct advertising
client relationships, 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 income (expense), net, (benefit from)
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.
There are a number of risks and uncertainties that could cause
actual results to differ materially from statements made in this
press release. If any of these risks or uncertainties materialize,
our actual results could differ materially from the results
expressed or implied by these forward-looking statements.
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, 2023, as filed on February 28, 2024,
and our Quarterly Reports on Form 10-Q for the three months ended
March 31, 2024, as filed on May 8, 2024, and for the three and six
months ended June 30, 2024, as filed on August 7, 2024. Additional
information will also be set forth in our Quarterly Report on Form
10-Q for the three and nine months ended September 30, 2024. 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,
2024
2023
2024
2023
Net revenue:
Device
$
247.7
$
270.0
$
709.9
$
753.4
Platform+
197.0
156.2
526.0
423.9
Total net revenue
444.7
426.2
1,235.9
1,177.3
Cost of goods sold:
Device
254.4
273.3
723.0
754.7
Platform+
81.2
56.4
223.3
164.5
Total cost of goods sold
335.6
329.7
946.3
919.2
Gross profit:
Device
(6.7
)
(3.3
)
(13.1
)
(1.3
)
Platform+
115.8
99.8
302.7
259.4
Total gross profit
109.1
96.5
289.6
258.1
Operating expenses:
Selling, general and administrative
85.2
63.6
241.1
180.4
Marketing
11.5
9.2
29.8
26.9
Research and development
16.8
9.8
47.4
31.7
Depreciation and amortization
1.2
1.2
3.7
3.3
Total operating expenses
114.7
83.8
322.0
242.3
(Loss) income from operations
(5.6
)
12.7
(32.4
)
15.8
Interest income, net
4.0
3.5
11.1
9.0
Other income (expense), net
1.1
(0.1
)
4.4
0.1
Total non-operating income, net
5.1
3.4
15.5
9.1
(Loss) income before income taxes
(0.5
)
16.1
(16.9
)
24.9
(Benefit from) provision for income
taxes
(1.0
)
2.3
(5.5
)
9.9
Net income (loss)
$
0.5
$
13.8
$
(11.4
)
$
15.0
Net income (loss) per share attributable
to Class A and Class B stockholders:
Basic
$
0.00
$
0.07
$
(0.06
)
$
0.08
Diluted
$
0.00
$
0.07
$
(0.06
)
$
0.08
Weighted-average Class A and Class B
common shares outstanding:
Basic
201.6
196.7
199.6
196.0
Diluted
211.7
199.9
199.6
200.2
VIZIO HOLDING CORP.
Consolidated Balance
Sheets
(Unaudited, in millions except
par values)
September 30,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
224.5
$
221.6
Short-term investments
134.5
129.9
Accounts receivable, net
323.9
381.2
Inventories
49.1
6.8
Income tax receivable
23.7
9.0
Prepaid and other current assets
55.2
45.9
Total current assets
810.9
794.4
Property, equipment and software, net
17.5
19.7
Goodwill
44.8
44.8
Deferred income taxes
49.6
49.6
Other assets
66.1
52.2
Total assets
$
988.9
$
960.7
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable due to related
parties
$
52.0
$
109.1
Accounts payable
221.6
157.8
Accrued expenses
178.0
178.6
Accrued royalties
29.3
40.7
Other current liabilities
8.8
5.8
Total current liabilities
489.7
492.0
Other long-term liabilities
18.9
19.4
Total liabilities
508.6
511.4
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, 2024 and December 31, 2023
—
—
Common stock, $0.0001 par value; 1,350.0
shares authorized as of September 30, 2024 and December 31,
2023
- Class A, 127.2 and 125.3 shares issued and 127.2 and 121.5
shares outstanding as of September 30, 2024 and December 31, 2023,
respectively,
- Class B, 75.3 and 76.2 shares issued and 75.3 and 76.2 shares
outstanding as of September 30, 2024 and December 31, 2023,
respectively
- Class C, no shares issued and outstanding as of September 30,
2024 and December 31, 2023
—
—
Additional paid-in capital
456.8
414.3
Accumulated other comprehensive loss
(0.4
)
(0.3
)
Retained earnings
23.9
35.3
Total stockholders’ equity
480.3
449.3
Total liabilities and stockholders’
equity
$
988.9
$
960.7
VIZIO HOLDING CORP.
Consolidated Statements of
Cash Flows
(Unaudited, in millions)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(11.4
)
$
15.0
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization
8.4
5.6
Realized gain on investments
(1.5
)
—
Amortization of premium and discount on
investments
(4.9
)
(3.3
)
Change in fair value of investment
securities
(0.6
)
—
Unrealized gain on conversion of
convertible equity investments
(3.0
)
—
Share-based compensation expense
37.7
30.4
Change in allowance for doubtful
accounts
(0.5
)
0.9
Changes in operating assets and
liabilities:
Accounts receivable
57.8
11.4
Other receivables due from related
parties
—
2.2
Inventories
(42.3
)
(2.1
)
Income taxes receivable
(14.7
)
1.7
Prepaid and other current assets
(9.3
)
(3.7
)
Other assets
(13.9
)
(15.5
)
Accounts payable due to related
parties
(57.1
)
(43.7
)
Accounts payable
63.6
19.4
Accrued expenses
(0.5
)
(29.4
)
Accrued royalties
(11.4
)
(6.6
)
Income taxes payable
—
1.0
Other current liabilities
3.0
1.2
Other long-term liabilities
(0.5
)
0.4
Net cash used in operating activities
(1.1
)
(15.1
)
Cash flows from investing activities:
Purchase of property and equipment
(2.8
)
(2.0
)
Purchase of investments
(107.6
)
(164.5
)
Sale of investments
2.0
—
Maturity of investments
107.9
105.9
Net cash used in investing activities
(0.5
)
(60.6
)
Cash flows from financing activities:
Proceeds from the exercise of stock
options
3.4
1.9
Withholding taxes paid on behalf of
employees on net settled share-based awards
—
(0.6
)
Proceeds from sale of stock under employee
stock purchase plan
1.2
1.2
Net cash provided by financing
activities
4.6
2.5
Effects of exchange rate changes on cash
and cash equivalents
(0.1
)
—
Net increase (decrease) in cash and cash
equivalents
2.9
(73.2
)
Cash and cash equivalents at beginning of
period
221.6
288.7
Cash and cash equivalents at end of
period
$
224.5
$
215.5
Supplemental disclosure of cash flow
information:
Cash paid for income taxes
$
8.4
$
5.1
Cash paid for interest
$
0.1
$
0.1
Cash paid for amounts included in the
measurement of operating lease liabilities
$
3.8
$
3.3
Supplemental disclosure of non-cash
investing and financing activities:
Right-of-use assets obtained in exchange
for new operating lease liabilities
$
2.7
$
1.8
Additions to property and equipment
financed by accounts payable
$
0.2
$
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,
2024
2023
2024
2023
Net income (loss)
$
0.5
$
13.8
$
(11.4
)
$
15.0
Adjusted to exclude the following:
Interest income, net
(4.0
)
(3.5
)
(11.1
)
(9.0
)
Other income (expense), net
(1.1
)
0.1
(4.4
)
(0.1
)
(Benefit from) provision for income
taxes
(1.0
)
2.3
(5.5
)
9.9
Depreciation and amortization
2.8
1.9
8.4
5.6
Share-based compensation
11.6
12.3
37.7
30.4
Adjusted EBITDA1
$
8.8
$
26.9
$
13.7
$
51.8
_________________________
1 For the three months ended September 30,
2024, Adjusted EBITDA includes acquisition-related costs of $10.6
million and cash incentive awards in lieu of equity awards of $3.1
million in connection with our long-term incentive plan. For the
nine months ended September 30, 2024, Adjusted EBITDA includes
acquisition-related costs of $24.7 million and cash incentive
awards in lieu of equity awards of $3.6 million in connection with
our long-term incentive plan.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241101202974/en/
Investors and Analysts: Michael Marks IR@vizio.com
Media: PR@vizio.com
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