VIZIO reports Q4 2022 results

Tuesday, February 28th, 2023 
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VIZIO HOLDING CORP. Reports Q4 2022 Financial Results

  • Platform+ net revenue increased 30% year-over-year (YoY) to $136.5 million
  • Platform+ gross profit increased 23% YoY to $ 82.8 million
  • SmartCast Average Revenue Per User increased 31% YoY to $28.30

IRVINE, Calif. — VIZIO Holding Corp. (NYSE: VZIO) today announced the following results for the three months ended December 31, 2022:

Financial and operational highlights include the following, compared to Q4’21:

  • Net revenue of $533.5 million, compared to $628.8 million
  • Platform+ net revenue of $136.5 million, up 30%
  • Gross profit of $85.7 million, up 11%
  • Platform+ gross profit of $82.8 million, up 23%
  • Net income of $6.3 million, compared to net loss of $10.1 million
  • Adjusted EBITDA of $19.9 million, up 15%
  • SmartCast Active Accounts of 17.4 million, up 15%
  • SmartCast Hours of 4.8 billion, up 24%
  • SmartCast Average Revenue Per User (ARPU) of $28.30, up 31%

“2022 marked our 20th anniversary as a company that has always been focused on delivering great products and experiences at affordable prices. While the year presented numerous well known challenges, our team did a great job executing our transition to a dual revenue model,” said, William Wang, CEO of VIZIO. “In just the third year since the launch of our Platform+ business, we grew revenue 55% and gross profit by 41% during 2022. I’m very excited for what the future holds for VIZIO. We remain focused and disciplined as we continue to invest in redefining the SmartTV.”

Business highlights include:

  • 50” V-Series (America’s #1 Bestselling TV in 2022) shipments increased by 65% in Q4’22
  • Named Wirecutter’s Budget Pick for Best LED TV for our M-Series Quantum X Smart TV in Q4’22
  • During Q4’22, surpassed 17 million SmartCast Active Accounts, which streamed 4.8 billion SmartCast Hours
  • Increased Q4’22 SmartCast Hours per SmartCast Active Account to 93 per month, up 7% versus Q4’21
  • Grew Platform+ advertising revenue 25% and non-advertising revenue 46% versus Q4’21
  • Expanded our direct advertising client relationships by 53% compared to Q4’21, adding 130 net new advertisers in Q4’22*
  • Unveiled an upgraded design and Entertainment Programming Guide experience for WatchFree+
  • In Q4’22, apps launched included AMC+, Fox Sports, Discovery GO, Hallmark Movies Now, and TLC Go

* Direct advertising relationships includes the number of advertisers that purchased advertising inventory directly from VIZIO during the fourth quarter. Net new advertisers for the quarter is calculated as the difference between the number of direct advertising relationships during the fourth quarter of 2022 versus the fourth quarter of 2021.

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

                                    Three Months Ended     Three          Year Ended      Full
                                          December 31,    Months        December 31,      Year
                                    ------------------  --------  ------------------  --------
                                        2022      2021  % Change      2022      2021  % Change
                                    --------  --------  --------  --------  --------  --------
Financial Highlights
Net Revenue
 Device                               $397.0    $523.7     (24)%  $1,384.9  $1,815.3     (24)%
 Platform+                             136.5     105.1       30%     477.9     308.7       55%
Total Net Revenue                      533.5     628.8     (15)%   1,862.8   2,124.0     (12)%
Gross Profit
 Device                                  2.9       9.8     (70)%      16.0     115.7     (86)%
 Platform+                              82.8      67.3       23%     296.5     210.6       41%
Total Gross Profit                      85.7      77.1       11%     312.5     326.3      (4)%
 Operating Expenses                     75.3      97.2     (23)%     306.2     355.9     (14)%
Net Income (Loss)                       $6.3   $(10.1)        NM    $(0.4)   $(39.4)        NM
Adjusted EBITDA                        $19.9     $17.3       15%     $52.4   $107.6      (51)%

Operational Metrics
 Smart TV Shipments                      1.5       1.5      (1)%       5.2      5.5       (6)%
 SmartCast Active Accounts (as of)      17.4      15.1       15%      17.4     15.1        15%
 Total VIZIO Hours                     8,950     7,915       13%    33,440   29,337        14%
 SmartCast Hours                       4,762     3,851       24%    17,403   14,598        19%
 SmartCast ARPU                       $28.30    $21.68       31%    $28.30   $21.68        31%

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 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.

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