Vizio reports Q2 2021 results

Wednesday, August 4th, 2021 
VIZIO logo

Vizio Holding Corp. Reports Q2 2021 Financial Results

  • Platform+ net revenue increased 146% year-over-year to $66 million
  • SmartCast Active accounts increased 43% year-over-year to 14 million
  • Average Revenue Per User increased 90% year-over-year to $16.76

IRVINE, Calif. — VIZIO Holding Corp. (NYSE: VZIO) today announced the following results for the second quarter ended June 30, 2021, as compared to the corresponding period of last year:

  • Net revenue of $401.2 million, up 2%
  • Gross profit of $79.5 million, up 37%
  • Net loss of $14.0 million, versus net income $17.3 million
  • Adjusted EBITDA of $26.5 million, up 7%
  • SmartCast Active Accounts of 14.0 million, up 43%
  • SmartCast Hours of 3.5 billion, up 22%
  • Average Revenue Per User (ARPU) of $16.76, up 90%

“VIZIO delivered excellent second quarter results driven by strong advertising growth, a direct benefit of our expanding dual revenue model,” said William Wang, CEO of VIZIO. “Our increased revenue, gross profit and adjusted EBITDA in the second quarter is a testament to our talented team, who rose to the challenges that we and many other industries continue to face as a result of the global pandemic. We continue to invest heavily in our talent, adding nearly 200 jobs throughout the company in the first half of 2021 as we ramp up our numerous CTV initiatives. With our Platform+ business continuing its rapid growth trajectory, supported by our ongoing investments in our software and hardware integration, we are excited about the path we are on during a transformative time in the media and entertainment industry.”

Business highlights include:

  • Launched our 2022 collection, which includes our 4K Ultra HD TVs and the industry’s best color range(1)
  • Expanded award-winning 2022 collection of immersive soundbars featuring DolbyAtmos and DTS:X
  • Powerful new Bluetooth VIZIO Voice remote enabling faster search & discovery
  • Doubled our direct advertiser customer base versus last year, and tripled our average revenue per advertiser
  • First IAB NewFronts presentation led to strong upfront commitments from advertisers
  • Expanded WatchFree with 32 FAST channels including Hallmark Movies, Real Crime, and Forensic Files
  • Leveraged first-party viewership data to launch curated FAST channels Fork & Flight and VIZIO Investigation
  • Surpassed 11 million TVs capable of dynamic ad insertion

Selected Quarterly Financial Results
(Unaudited, in millions, except percentages and ARPU)

                                     Three Months Ended June 30,
                                        2021      2020  % Change
                                    --------  --------  --------
Financial Highlights(2):
 Device                             $  335.6  $  366.9      (9)%
 Platform+                              65.5      26.6      146%
                                    --------  --------  --------
Total Revenue                       $  401.2  $  393.5        2%

Gross Profit
 Device                                 32.1      40.2     (20)%
 Platform+                              47.5      17.8      167%
                                    --------  --------  --------
Total Gross Profit                      79.5      58.0       37%
 Operating Expenses                     88.4      35.2      151%
                                    --------  --------  --------
Net Income                          $ (14.0)  $   17.3    (181)%
                                    --------  --------  --------
Adjusted EBITDA                     $   26.5  $   24.7        7%

Operational Metrics:
 Smart TV Shipments                      1.1       1.6     (31)%
 SmartCast Active Accounts (as of)      14.0       9.8       43%
 VIZIO Hours                           7,151     5,870       22%
 SmartCast Hours                       3,505     2,874       22%
 SmartCast ARPU (TTM)               $  16.76  $   8.82       90%

Financial Outlook (In millions)

                        Third Quarter
Platform+ Net Revenue       $76 - $82
Platform+ Gross Profit      $55 - $60
Adjusted EBITDA             $20 - $25

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.

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 units shipped 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 critical 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.

1. Based on the industry standard Rec. 2020 (uv) color space, per third-party/ as of August 2, 2021
2. Subtotals may not add due to rounding

Links: VIZIO