VIZIO reports Q3 2022 results

Wednesday, November 9th, 2022 
VIZIO logo

IRVINE, Calif. — VIZIO Holding Corp. (NYSE: VZIO) today announced the following results for the three months ended September 30, 2022, as compared to the corresponding period of last year:

Financial and operational highlights include:

  • Net revenue of $435.0 million, compared to $588.3 million
  • Platform+ net revenue of $128.0 million, up 49%
  • Gross profit of $80.1 million, compared to $82.9 million
  • Platform+ gross profit of $78.9 million, up 38%
  • Net income of $2.0 million, compared to net loss of $18.6 million
  • Adjusted EBITDA of $16.7 million, compared to $23.4 million
  • SmartCast Active Accounts of 16.6 million, up 15%
  • SmartCast Hours of 4.2 billion, up 17%
  • SmartCast Average Revenue Per User (ARPU) of $27.69, up 39%

“An important motto for VIZIO has always been “growth meets discipline.” Our third quarter results are a continued reflection of this as we grew our platform revenue by 49% and our total company Adjusted EBITDA came in at $17 million, all of which surpassed the high-end of our guidance ranges,” said, William Wang, CEO of VIZIO. “We also recently celebrated 20 years of history and launched our new collection of Smart TVs that include many upgrades and improvements to the consumer experience at an incredible value.”

Business highlights include:

  • #2 Smart TV Brand during Q3’22
  • 40” D-Series model was the #1 bestselling TV and 50” V-Series model was the #2 bestselling TV
  • Surpassed 16.6 million SmartCast Active Accounts in Q3’22
  • Grew advertising revenue 47% and non-advertising revenue 55% year-over-year
  • Expanded our direct advertising client relationships by 65%, adding 158 net new advertisers*
  • Launched VIZIO Account, allowing users to subscribe and manage streaming services directly on our platform
  • Released a developer program, created to help developers and content distributors build apps and experiences

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

                    Three Months Ended September 30,
                               2022             2021  % Change
                    ---------------  ---------------  --------
Financial Highlights Net Revenue
 Device                      $307.0           $502.5     (39)%
 Platform+                    128.0             85.8       49%
Total Net Revenue             435.0            588.3     (26)%
Gross Profit
 Device                         1.2             25.6     (95)%
 Platform+                     78.9             57.3       38%
Total Gross Profit             80.1             82.9      (3)%
 Operating Expenses            75.4             97.5     (23)%
Net Income (Loss)              $2.0          $(18.6)        NM
Adjusted EBITDA               $16.7            $23.4     (29)%

Operational Metrics
Smart TV Shipments              1.2              1.4     (15)%
SmartCast Active Accounts      16.6             14.4       15%
Total VIZIO Hours             8,129            7,320       11%
SmartCast Hours               4,243            3,620       17%
SmartCast ARPU               $27.69           $19.89       39%

* Direct advertising relationships includes 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 2022 versus the third quarter of 2021.

NM-Not Meaningful

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 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 on which 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 and 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.

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