VIZIO reports Q1 2023 financial results

Tuesday, May 9th, 2023 
|
VIZIO logo

VIZIO Holding Corp. Reports Q1 2023 Financial Results

  • Platform+ net revenue increased 22% year-over-year (YoY) to $125.5 million
  • Platform+ gross profit increased 14% YoY to $73.8 million
  • SmartCast Average Revenue Per User increased 23% YoY to $29.20

IRVINE, Calif. — VIZIO Holding Corp. (NYSE: VZIO) today announced results for the three months ended March 31, 2023.

Financial and operational highlights include the following, compared to Q1’22:

  • Net revenue of $356.7 million, compared to $485.5 million
  • Platform+ net revenue of $125.5 million, up 22%
  • Gross profit of $75.4 million, up 4%
  • Platform+ gross profit of $73.8 million, up 14%
  • Net loss of $0.7 million, compared to net loss of $11.0 million
  • Adjusted EBITDA of $6.7 million, up 52%
  • SmartCast Average Revenue Per User (ARPU) of $29.20, up 23%

“Q1 kicked off our 21st year of selling award-winning, affordable products and experiences, and we continue to see success in the execution of our combined hardware and software strategy,” said William Wang, CEO of VIZIO. “As you can see from our results, our advertising business continued to show strength in Q1, up 24% year-over-year, which exceeded our expectations. Our results speak to the progress we’ve made in raising awareness of VIZIO as a scaled destination for advertisers to reach viewers.”

Q1’23 Business highlights include:

  • Reached 17.5 million SmartCast Active Accounts, which streamed 4.9 billion hours
  • Increased average SmartCast Hours per SmartCast Active Account to 93 per month, up 5% YoY
  • Partnered with Amazon, Best Buy, Costco, Sam’s Club, Target, and Walmart on exclusive offers
  • Expanded our direct ad client relationships by 77% compared to Q1’22, adding 148 net new advertisers in Q1’23*
  • Launched a suite of new features, including on-screen navigation shortcuts and an improved mobile app
  • Honored with an Emmy Award for Technology and Engineering around our innovative use of ACR technology
  • Launched 23 apps including SiriusXM, OWN, Animal Planet, Destination America, and Travel Channel Go
  • Added 23 WatchFree+ channels including Tastemade Home, Afroland TV, Portlandia and MSG Sports Zone

* Direct advertising relationships includes the number of advertisers that purchased advertising inventory directly from VIZIO during the first quarter. Net new advertisers for the quarter is calculated as the difference between the number of direct advertising relationships during the first quarter of 2023 versus the first quarter of 2022.

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

                                              Three Months Ended
                                                       March 31,
                                    ------------------  --------
                                        2023      2022  % Change
                                    --------  --------  --------
Financial Highlights
Net Revenue
 Device                               $231.2    $382.9     (40)%
 Platform+                             125.5     102.6       22%
Total Net Revenue                      356.7     485.5     (27)%
Gross Profit
 Device                                  1.6       7.9     (80)%
 Platform+                              73.8      64.9       14%
Total Gross Profit                      75.4      72.8        4%
 Operating Expenses                     78.7      85.7      (8)%
Net Loss                              $(0.7)   $(11.0)        NM
Adjusted EBITDA                         $6.7      $4.4       52%

Operational Metrics
 Smart TV Shipments                      0.9       1.4     (32)%
 SmartCast Active Accounts (as of)      17.5      15.6       12%
 Total VIZIO Hours                     8,992     8,208       10%
 SmartCast Hours                       4,881     4,116       19%
 SmartCast ARPU                       $29.20    $23.68       23%

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.

More: Results release

Links: VIZIO