VIZIO Holding Corp. Reports Q2 2022 Financial Results
VIZIO Holding Corp. reported a 2% increase in net revenue for Q2 2022, totaling $408.9 million. The Platform+ segment saw robust growth, with net revenue jumping 69% YoY to $110.8 million and gross profit up 47% YoY to $69.9 million. Average Revenue Per User (ARPU) soared 54% YoY to $25.87. This quarter marked a net income of $2.3 million, a turnaround from a net loss of $14.0 million last year. Despite a decline in device gross profit and adjusted EBITDA down 57% to $11.4 million, the company maintains a positive outlook for Q3, projecting Platform+ net revenue between $120 million and $125 million.
- Platform+ net revenue increased 69% YoY to $110.8 million.
- Average Revenue Per User surged 54% YoY to $25.87.
- Net income turned positive at $2.3 million from a loss of $14.0 million.
- SmartCast Active Accounts grew 15% YoY, reaching 16.1 million.
- Q3 2022 guidance for Platform+ net revenue is $120 - $125 million.
- Device gross profit decreased 88% YoY to $4.0 million.
- Total gross profit fell 7% YoY to $73.9 million.
- Adjusted EBITDA dropped 57% YoY to $11.4 million.
Platform+ net revenue increased
Platform+ gross profit increased
Average Revenue Per User increased
Financial and operational highlights include:
-
Net revenue of
$408.9 million 2% -
Platform+ net revenue of
$110.8 million 69% -
Gross profit of
$73.9 million $79.5 million -
Platform+ gross profit of
$69.9 million 47% -
Net income of
$2.3 million $14.0 million -
Adjusted EBITDA1 of
$11.4 million $26.4 million -
SmartCast Active Accounts of 16.1 million, up
15% -
SmartCast Hours of 4.3 billion, up
22% -
Average Revenue Per User (ARPU) of
$25.87 54%
“VIZIO has always been focused on great design, great user experiences, but just as importantly, a culture of discipline and efficiency. I am very proud of our strong and seasoned management team that has endured many business cycles and proven to be resilient.” said
Business highlights include:
- #2 Smart TV Brand during Q2'222
-
50” V-Series model remained the #1 bestselling TV with unit shipments increasing
36% year-over-year3 -
Increased Smart TV Shipments
5% year-over-year - Surpassed 16 million SmartCast Active Accounts that streamed 4.3 billion SmartCast hours in Q2'22
-
Grew advertising revenue
71% and non-advertising revenue65% year-over-year - Recognized as a Fortune 1000 brand and recognized by Newsweek as one of America's Best Home and Garden brands for Smart TVs
-
Launched Apps include
TikTok , Outdoor America, Nosey, and Playwork Kids - VIZIO was added as a member of the US Russell 3000 Index
| Selected Quarterly Financial Results | ||||||||||||
| (Unaudited, in millions, except percentages and ARPU) | ||||||||||||
|
|
Three Months Ended
|
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||||||||
|
|
2022 |
|
2021 |
|
% Change |
||||||
Financial Highlights |
|
|
|
|
|
|
||||||
Net Revenue |
|
|
|
|
|
|
||||||
Device |
|
$ |
298.1 |
|
$ |
335.6 |
|
|
(11) |
% |
||
Platform+ |
|
|
110.8 |
|
|
65.5 |
|
|
69 |
% |
||
Total Net Revenue |
|
|
408.9 |
|
|
401.1 |
|
|
2 |
% |
||
Gross Profit |
|
|
|
|
|
|
||||||
Device |
|
|
4.0 |
|
|
32.0 |
|
|
(88) |
% |
||
Platform+ |
|
|
69.9 |
|
|
47.5 |
|
|
47 |
% |
||
Total Gross Profit |
|
|
73.9 |
|
|
79.5 |
|
|
(7) |
% |
||
Operating Expenses |
|
|
69.8 |
|
|
88.4 |
|
|
(21) |
% |
||
Net Income (Loss) |
|
$ |
2.3 |
|
$ |
(14.0 |
) |
|
NM |
|
||
Adjusted EBITDA 1 |
|
$ |
11.4 |
|
$ |
26.4 |
|
|
(57) |
% |
||
|
|
|
|
|
|
|
||||||
Operational Metrics |
|
|
|
|
|
|
||||||
Smart TV Shipments |
|
|
1.1 |
|
|
1.1 |
|
|
5 |
% |
||
SmartCast Active Accounts |
|
|
16.1 |
|
|
14.0 |
|
|
15 |
% |
||
Total VIZIO Hours |
|
|
8,154 |
|
|
7,151 |
|
|
14 |
% |
||
SmartCast Hours |
|
|
4,281 |
|
|
3,505 |
|
|
22 |
% |
||
SmartCast ARPU |
|
$ |
25.87 |
|
$ |
16.76 |
|
|
54 |
% |
||
| __________________________________ | ||
1 |
A reconciliation of Net Income (Loss) to Adjusted EBITDA is provided below. |
|
2 |
|
|
3 |
|
|
Financial Outlook |
|
(In millions) |
|
|
|
|
Third Quarter 2022 |
Platform+ Net Revenue |
|
Platform+ Gross Profit |
|
Adjusted EBITDA |
|
Virtual Investor Event –
VIZIO management will hold a live question and answer webcast at
About VIZIO
Founded and headquartered in
Supplemental Financial and Other Information
Supplemental financial and other information can be accessed through VIZIO’s Investor Relations website at investors.vizio.com. VIZIO announces material information to the public about VIZIO, its products and services, and other matters through a variety of means, including filings with the
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.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in
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 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.
Forward-looking statements in this press release include, but are not limited to, statements regarding VIZIO’s future financial and operating performance, including our outlook and guidance and our expectations regarding advertising spend commitments. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in our plans or assumptions, that could cause actual results to differ materially from those projected. These risks include the possibility that: we are not able to keep pace with technological advances in our industry and successfully compete in highly competitive markets; we do not have the ability to continue to increase the sales of our Smart TVs; we cannot attract and maintain SmartCast Active Accounts; we cannot increase SmartCast Hours; we are not able to attract and maintain popular content on our platform; we are not able to maintain relationships with advertisers; and we cannot adapt to market conditions and technological developments, including with respect to our platform's compatibility with applications developed by content providers; and an economic downturn or economic uncertainty adversely affects consumer discretionary spending and advertising.
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
Source:
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Condensed Consolidated Statements of Operations |
|||||||||||||||
(Unaudited, in millions except per share amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net revenue: |
|
|
|
|
|
|
|
||||||||
Device |
$ |
298.1 |
|
|
$ |
335.6 |
|
|
$ |
680.9 |
|
|
$ |
789.1 |
|
Platform+ |
|
110.8 |
|
|
|
65.5 |
|
|
|
213.4 |
|
|
|
117.7 |
|
Total net revenue |
|
408.9 |
|
|
|
401.1 |
|
|
|
894.3 |
|
|
|
906.8 |
|
Cost of goods sold: |
|
|
|
|
|
|
|
||||||||
Device |
|
294.1 |
|
|
|
303.6 |
|
|
|
669.0 |
|
|
|
708.8 |
|
Platform+ |
|
40.9 |
|
|
|
18.0 |
|
|
|
78.6 |
|
|
|
31.8 |
|
Total cost of goods sold |
|
335.0 |
|
|
|
321.6 |
|
|
|
747.6 |
|
|
|
740.6 |
|
Gross profit: |
|
|
|
|
|
|
|
||||||||
Device |
|
4.0 |
|
|
|
32.0 |
|
|
|
11.9 |
|
|
|
80.3 |
|
Platform+ |
|
69.9 |
|
|
|
47.5 |
|
|
|
134.8 |
|
|
|
85.9 |
|
Total gross profit |
|
73.9 |
|
|
|
79.5 |
|
|
|
146.7 |
|
|
|
166.2 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
50.3 |
|
|
|
70.4 |
|
|
|
112.7 |
|
|
|
128.5 |
|
Marketing |
|
9.2 |
|
|
|
10.0 |
|
|
|
22.5 |
|
|
|
14.4 |
|
Research and development |
|
9.4 |
|
|
|
7.3 |
|
|
|
18.6 |
|
|
|
17.1 |
|
Depreciation and amortization |
|
0.9 |
|
|
|
0.7 |
|
|
|
1.8 |
|
|
|
1.3 |
|
Total operating expenses |
|
69.8 |
|
|
|
88.4 |
|
|
|
155.6 |
|
|
|
161.3 |
|
Income (loss) from operations |
|
4.1 |
|
|
|
(8.9 |
) |
|
|
(8.9 |
) |
|
|
4.9 |
|
Interest income, net |
|
— |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.1 |
|
Other expense, net |
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
|
(0.1 |
) |
Total non-operating (expense) income, net |
|
(0.8 |
) |
|
|
0.1 |
|
|
|
(0.7 |
) |
|
|
— |
|
Income (loss) before income taxes |
|
3.3 |
|
|
|
(8.8 |
) |
|
|
(9.6 |
) |
|
|
4.9 |
|
Provision for (benefit from) income taxes |
|
1.0 |
|
|
|
5.2 |
|
|
|
(0.9 |
) |
|
|
15.6 |
|
Net income (loss) |
$ |
2.3 |
|
|
$ |
(14.0 |
) |
|
$ |
(8.7 |
) |
|
$ |
(10.7 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Class A and Class B stockholders: |
|
|
|
|
|
|
|
||||||||
Basic |
|
0.01 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
Diluted |
|
0.01 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
Weighted-average Class A and Class B common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
192.9 |
|
|
|
184.3 |
|
|
|
192.0 |
|
|
|
165.1 |
|
Diluted |
|
196.8 |
|
|
|
184.3 |
|
|
|
192.0 |
|
|
|
165.1 |
|
|
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(Unaudited, in millions except per share amounts) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
335.8 |
|
|
$ |
331.6 |
|
Accounts receivable, net |
|
253.8 |
|
|
|
375.1 |
|
Other receivables due from related parties |
|
1.3 |
|
|
|
5.1 |
|
Inventories |
|
31.0 |
|
|
|
11.9 |
|
Income tax receivable |
|
29.9 |
|
|
|
26.2 |
|
Prepaid and other current assets |
|
91.4 |
|
|
|
84.8 |
|
Total current assets |
|
743.2 |
|
|
|
834.7 |
|
Property, equipment and software, net |
|
18.7 |
|
|
|
10.3 |
|
|
|
44.8 |
|
|
|
44.8 |
|
Deferred income taxes |
|
30.4 |
|
|
|
30.4 |
|
Other assets |
|
21.2 |
|
|
|
15.6 |
|
Total assets |
$ |
858.3 |
|
|
$ |
935.8 |
|
Liabilities and Stockholders' Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable due to related parties |
$ |
147.7 |
|
|
$ |
224.8 |
|
Accounts payable |
|
114.8 |
|
|
|
118.9 |
|
Accrued expenses |
|
187.8 |
|
|
|
185.8 |
|
Accrued royalties |
|
42.4 |
|
|
|
56.8 |
|
Other current liabilities |
|
4.9 |
|
|
|
4.8 |
|
Total current liabilities |
|
497.6 |
|
|
|
591.1 |
|
Other long-term liabilities |
|
19.3 |
|
|
|
14.1 |
|
Total liabilities |
|
516.9 |
|
|
|
605.2 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock,
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
342.8 |
|
|
|
323.3 |
|
Accumulated other comprehensive loss |
|
(0.2 |
) |
|
|
(0.2 |
) |
Retained earnings (accumulated deficit) |
|
(1.2 |
) |
|
|
7.5 |
|
Total stockholders’ equity |
|
341.4 |
|
|
|
330.6 |
|
Total liabilities and stockholders' equity |
$ |
858.3 |
|
|
$ |
935.8 |
|
|
|||||||
Condensed Consolidated Statements of Cash Flows |
|||||||
(Unaudited, in millions) |
|||||||
|
Six Months Ended |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
||||||
Net loss |
$ |
(8.7 |
) |
|
$ |
(10.7 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
1.8 |
|
|
|
1.3 |
|
Deferred income taxes |
|
— |
|
|
|
1.2 |
|
Share-based compensation expense |
|
23.0 |
|
|
|
60.7 |
|
Change in allowance for doubtful accounts |
|
2.7 |
|
|
|
0.7 |
|
Change in fair value of investment securities |
|
0.7 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
118.6 |
|
|
|
211.0 |
|
Other receivables due from related parties |
|
3.8 |
|
|
|
0.2 |
|
Inventories |
|
(19.1 |
) |
|
|
(6.7 |
) |
Income taxes receivable |
|
(3.7 |
) |
|
|
(13.8 |
) |
Prepaid and other current assets |
|
(6.9 |
) |
|
|
(23.2 |
) |
Other assets |
|
(4.5 |
) |
|
|
1.1 |
|
Accounts payable due to related parties |
|
(77.0 |
) |
|
|
(77.6 |
) |
Accounts payable |
|
(4.1 |
) |
|
|
(50.8 |
) |
Accrued expenses |
|
2.0 |
|
|
|
(26.5 |
) |
Accrued royalties |
|
(14.4 |
) |
|
|
(15.1 |
) |
Other current liabilities |
|
(0.1 |
) |
|
|
(0.1 |
) |
Other long-term liabilities |
|
5.2 |
|
|
|
(0.7 |
) |
Net cash provided by operating activities |
|
19.3 |
|
|
|
51.0 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(9.9 |
) |
|
|
(2.8 |
) |
Purchase of investments |
|
(1.7 |
) |
|
|
(0.2 |
) |
Net cash used in investing activities |
|
(11.6 |
) |
|
|
(3.0 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from the exercise of stock options |
|
8.5 |
|
|
|
1.3 |
|
Payment of dividends on Series A convertible preferred stock |
|
— |
|
|
|
(0.6 |
) |
Proceeds from IPO, net of |
|
— |
|
|
|
148.0 |
|
Payments of other offering costs |
|
— |
|
|
|
(2.6 |
) |
Withholding taxes paid on behalf of employees on net settled share-based awards |
|
(12.0 |
) |
|
|
(35.4 |
) |
Net cash (used in) provided by financing activities |
|
(3.5 |
) |
|
|
110.7 |
|
Effects of exchange rate changes on cash and cash equivalents |
|
— |
|
|
|
(1.0 |
) |
Net increase in cash and cash equivalents |
|
4.2 |
|
|
|
157.7 |
|
Cash and cash equivalents at beginning of period |
|
331.6 |
|
|
|
207.7 |
|
Cash and cash equivalents at end of period |
$ |
335.8 |
|
|
$ |
365.4 |
|
Supplemental disclosure of cash flow information: |
|
|
|
||||
Cash paid for income taxes |
$ |
3.0 |
|
|
$ |
26.7 |
|
Cash paid for interest |
$ |
0.1 |
|
|
$ |
0.1 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities |
$ |
5.3 |
|
|
$ |
— |
|
Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
1.7 |
|
|
$ |
1.4 |
|
Payment to taxing authority in connection with shares directly withheld from employees not yet made |
$ |
— |
|
|
$ |
5.1 |
|
IPO costs not yet paid |
$ |
— |
|
|
$ |
0.4 |
|
|
|||||||||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|||||||||||||||
(Unaudited, in millions) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
||||||||||||||
Net income (loss) |
$ |
2.3 |
|
$ |
(14.0 |
) |
|
$ |
(8.7 |
) |
|
$ |
(10.7 |
) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
||||||||
Interest income, net |
|
— |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
Other expense, net |
|
0.8 |
|
|
— |
|
|
|
0.8 |
|
|
|
0.1 |
|
|
Provision for (benefit from) income taxes |
|
1.0 |
|
|
5.2 |
|
|
|
(0.9 |
) |
|
|
15.6 |
|
|
Depreciation and amortization |
|
0.9 |
|
|
0.7 |
|
|
|
1.8 |
|
|
|
1.3 |
|
|
Share-based compensation |
|
6.4 |
|
|
34.6 |
|
|
|
23.0 |
|
|
|
60.7 |
|
|
Adjusted EBITDA |
$ |
11.4 |
|
$ |
26.4 |
|
|
$ |
15.9 |
|
|
$ |
66.9 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220808005857/en/
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FAQ
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