VIZIO Holding Corp. (NYSE: VZIO) today announced
its financial results for the quarter ended March 31, 2021.
“Our first quarter results demonstrate the success of our
investments in our Device and Platform business," said William
Wang, Founder and Chief Executive Officer of VIZIO Holding Corp.
“We see tremendous opportunity ahead as we continue to invest in
the quality of our execution, the quality of our products, and most
importantly, the quality of our team. The evolution of TV is
calling for a revolution, and VIZIO is here to answer it.”
First Quarter 2021 Highlights
Financial and operational highlights include:
- Net revenue increased 52% year over year to $505.7 million
- Platform+ net revenue increased 120% year over year to $52.2
million
- Gross profit increased 82% year over year to $86.7 million
- Net income declined 64% year over year to $3.3 million
- Adjusted EBITDA increased 218% year over year to $40.4
million
- SmartCast Active Accounts grew 57% year over year to 13.4
million
- SmartCast Hours grew 70% year over year to 3.6 billion
- Average Revenue Per User (ARPU) increased 76% year over year to
$14.52
Business highlights include:
- Ranked #2 best-selling TV brand in the US during Q1 20211
- Ranked #1 best-selling Sound Bar in the US during Q1 20212
- Named Best Connected TV Platform by Digiday
- Awarded IGN's Best 4K TV for Gaming (P-Series Quantum 9)
- Editors' Choice Award from IGN, Reviewed and Newsweek (OLED,
P-Series Quantum X and Quantum 9)
- Editors' Choice Award from Reviewed and WIRED Recommends
(V-Series, M-Series and Elevate Sound Bar)
- Added 32 free ad-supported channels, including HSN/QVC, Fuse
Sweat, and several from AMC Networks
- Univision joined Project OAR as the first Spanish-language
network
- Launched The CW, FOX NOW, and FOX Nation streaming apps
_________________________
1 The NPD Group, Inc., Retail Tracking Service, U.S., LCD TVs,
based on unit share, Jan. - Mar. 2021. 2 The NPD Group, Inc.,
Retail Tracking Service, U.S., Sound Bars, based on unit share,
Jan. - Mar. 2021.
Selected Quarterly Financial
Results
(Unaudited, in millions, except
percentages and ARPU)
Three Months Ended March
31,
Change
2021
2020
%
Financial
Highlights:(1)
Net revenue:
Device
$
453.5
$
308.9
47
%
Platform+
52.2
23.7
120
%
Total net revenue
505.7
332.5
52
%
Gross profit:
Device
48.2
32.5
48
%
Platform+
38.4
15.2
152
%
Total gross profit
86.7
47.7
82
%
Operating expenses
72.9
37.0
97
%
Net income
3.3
9.3
(64
)%
Adjusted EBITDA(2)
$
40.4
$
12.7
218
%
Operational
Metrics:
Smart TV Shipments
1.5
1.2
28
%
SmartCast Active Accounts (as of)
13.4
8.5
57
%
Total VIZIO Hours
6,951
4,912
42
%
SmartCast Hours
3,622
2,137
70
%
SmartCast ARPU
$
14.52
$
8.23
76
%
_________________________
(1) some subtotals may not add due to rounding (2) a
reconciliation of Net Income to Adjusted EBITDA is provided
below
Financial Outlook
(In millions)
Second Quarter 2021
Platform+ Net Revenue
$55 - $59
Platform+ Gross Profit
$36 - $40
Adjusted EBITDA
$12 - $18
Virtual Investor Event – Tuesday, May 11, 2021
VIZIO management will hold a live question and answer
webcast at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to
discuss VIZIO's quarterly results and outlook. To listen to the
webcast please visit this link. Following the live audio webcast, a
playback will be available on VIZIO's Investor Relations website
(investors.vizio.com) through June 1, 2021 at 11:59 p.m. (ET).
About VIZIO
Founded and headquartered in Orange County, California, VIZIO’s
mission is to deliver immersive entertainment and compelling
lifestyle enhancements that make our products the center of the
connected home. VIZIO is driving the future of televisions through
its integrated platform of cutting-edge Smart TVs and powerful
SmartCast operating system. VIZIO also offers a portfolio of
innovative sound bars that deliver consumers an elevated audio
experience. VIZIO’s platform gives content providers more ways to
distribute their content and advertisers more tools to target and
dynamically serve ads to a growing audience that is increasingly
transitioning away from linear TV.
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 Securities and Exchange
Commission, press releases, public conference calls, webcasts, its
Investor Relations website (investors.vizio.com), its blog
(accessible via vizio.com/en/newsroom) and its Twitter account
(@VIZIO) in order to achieve broad, non-exclusionary distribution
of information to the public and for complying with its disclosure
obligations under Regulation FD.
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.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance
with generally accepted accounting principles in the United States
of America, or GAAP, VIZIO considers certain financial measures
that are not prepared in accordance with GAAP, including Adjusted
EBITDA. We define Adjusted EBITDA as total net income before
interest income, other (expense) income, net, provision for income
taxes, depreciation and amortization and share-based compensation.
We consider Adjusted EBITDA to be an important metric to assess our
operating performance and help us to manage our working capital
needs. Utilizing Adjusted EBITDA, we can identify and evaluate
trends in our business as well as provide investors with
consistency and comparability to facilitate period-to-period
comparisons of our business. We believe that providing users with
non-GAAP measures such as Adjusted EBITDA may assist investors in
seeing VIZIO’s operating results through the eyes of management and
in comparing VIZIO’s operating results over multiple periods with
other companies in our industry.
We use Adjusted EBITDA in conjunction with net income 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 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.
We compensate for these limitations by providing a
reconciliation of Adjusted EBITDA to net income. We encourage
investors and others not to rely on any single financial measure
and to view Adjusted EBITDA in conjunction with net income.
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, our
expectations regarding the impact of the COVID-19 pandemic, and our
ability to keep pace with technological advances in our industry
and successfully compete in highly competitive markets. 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 cannot adapt
to market conditions and technological developments, including with
respect to our platform's compatibility with applications developed
by content providers.
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 Securities and
Exchange Commission, including our prospectus filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended, on March
24, 2021, and in our Quarterly Report on Form 10-Q that will be
filed following this earnings release. The forward-looking
statements in this press release are based on information available
to VIZIO as of the date hereof, and VIZIO disclaims any obligation
to update any forward-looking statements, except as required by
law.
Condensed Consolidated
Statement of Operations
(Unaudited, in thousands except
per share amounts)
Three Months Ended
March 31,
2021
2020
Net revenue:
Device
$
453,460
$
308,855
Platform+
52,196
23,685
Total net revenue
505,656
332,540
Cost of goods sold:
Device
405,238
276,357
Platform+
13,753
8,456
Total cost of goods sold
418,991
284,813
Gross profit:
Device
48,222
32,498
Platform+
38,443
15,229
Total gross profit
86,665
47,727
Operating expenses:
Selling, general and administrative
67,851
30,116
Marketing
4,404
6,248
Depreciation and amortization
614
660
Total operating expenses
72,869
37,024
Income from operations
13,796
10,703
Interest income
82
348
Other (expense) income, net
(189
)
345
Total non-operating (expense) income
(107
)
693
Income before income taxes
13,689
11,396
Provision for income taxes
10,344
2,109
Net income
$
3,345
$
9,287
Net income attributable to Class A and
Class B stockholders:
Basic
$
0.02
$
0.05
Diluted
$
0.02
$
0.05
Weighted-average Class A and Class B
common shares outstanding:
Basic
145,730
144,268
Diluted
157,174
146,944
Condensed Consolidated Balance
Sheets
(In thousands except per share
amounts)
As of
March 31, 2021
December 31,
2020
Assets
(Unaudited)
(Audited)
Current assets:
Cash and cash equivalents
$
435,135
$
207,728
Accounts receivable, net
248,503
405,609
Other receivables due from related
parties
815
978
Inventories
9,743
10,545
Income tax receivable
—
1,315
Other current assets
56,599
55,460
Total current assets
750,795
681,635
Property, equipment and software, net
9,829
7,929
Goodwill, net
44,788
44,788
Intangible assets, net
102
131
Deferred income taxes
25,424
26,652
Other assets
13,218
13,847
Total assets
$
844,156
$
774,982
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable due to related
parties
$
159,680
$
209,362
Accounts payable
128,365
166,805
Accrued expenses
146,043
154,959
Accrued royalties
77,223
81,143
Other current liabilities
12,081
5,272
Total current liabilities
523,392
617,541
Other long-term liabilities
7,810
8,210
Total liabilities
531,202
625,751
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value;
100,000 and 0 shares authorized and no shares issued and
outstanding as of March 31, 2021 and December 31, 2020,
respectively
—
—
Series A convertible preferred stock,
$0.0001 par value; 0 and 250 shares authorized and 0 and 135 shares
issued and outstanding as of March 31, 2021 and December 31, 2020,
respectively
—
2,565
Common stock, $0.0001 par value; 1,000,000
and 675,000 Class A shares authorized, 85,470 and 150,831 Class A
shares issued, and 85,036 and 150,831 Class A shares outstanding as
of March 31, 2021 and December 31, 2020, respectively; 200,000 and
0 Class B shares authorized and 98,633 and 0 Class B shares issued
and outstanding as of March 31, 2021 and December 31, 2020,
respectively; 150,000 and 0 Class C shares authorized, 0 Class C
shares issued and outstanding as of March 31, 2021 and December 31,
2020, respectively
18
15
Additional paid-in capital
262,799
98,885
Accumulated other comprehensive (loss)
income
(72
)
873
Retained earnings
50,209
46,893
Total stockholders’ equity
312,954
149,231
Total liabilities and stockholders'
equity
$
844,156
$
774,982
Condensed Consolidated
Statement of Cash Flows
(Unaudited, in thousands)
Three Months Ended
March 31,
2021
2020
Cash flows from operating activities:
Net income
$
3,345
$
9,287
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
614
660
Deferred income taxes
1,228
—
Share-based compensation expense
26,019
1,339
Changes in operating assets and
liabilities:
Accounts receivable
157,102
172,180
Other receivables due from related
parties
164
2,486
Inventories
808
3,889
Income taxes receivable
1,323
778
Other current assets
(1,338
)
(1,381
)
Other assets
628
(2,719
)
Accounts payable due to related
parties
(49,680
)
(107,415
)
Accounts payable
(38,249
)
(69,752
)
Accrued expenses
(19,659
)
(38,892
)
Accrued royalties
(3,920
)
(115
)
Income taxes payable
6,823
1,339
Other current liabilities
(17
)
471
Other long-term liabilities
(400
)
2,419
Net cash provided by (used in) operating
activities
84,791
(25,426
)
Cash flows from investing activities:
Purchase of property and equipment
(2,353
)
(280
)
Net cash used in investing activities
(2,353
)
(280
)
Cash flows from financing activities:
Proceeds from exercise of stock
options
—
158
Payment of dividends on Series A
convertible preferred stock
(594
)
—
Proceeds from IPO, net of $10,700
underwriting fees
148,044
—
Payments of offering costs
(1,363
)
—
Net cash provided by financing
activities
146,087
158
Effects of exchange rate changes on cash
and cash equivalents
(1,118
)
(2
)
Net increase (decrease) in cash and cash
equivalents
227,407
(25,550
)
Cash and cash equivalents at beginning of
year
207,728
176,579
Cash and cash equivalents at end of
year
$
435,135
$
151,029
Supplemental disclosure of cash flow
information:
Net cash paid (received) during the period
for income taxes
$
69
$
(56
)
Cash paid for interest
$
47
$
38
Supplemental disclosure of non-cash
investing and financing activities:
Right-of-use assets obtained in exchange
for new operating lease liabilities
$
—
$
3,366
Cash paid for amounts included in the
measurement of operating lease liabilities
$
720
$
551
Payment to taxing authority in connection
with shares directly withheld from
employees not yet made
$
9,121
$
—
IPO costs not yet paid
$
1,663
$
—
Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended
March 31,
2021
2020
(Unaudited, in thousands)
Net income
$
3,345
$
9,287
Adjusted to exclude the following:
Interest income
(82
)
(348
)
Other expense (income), net
189
(345
)
Provision for income taxes
10,344
2,109
Depreciation and amortization
614
660
Share-based compensation
26,019
1,339
Adjusted EBITDA
$
40,429
$
12,702
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511006163/en/
Investors and Analysts: Michael Marks IR@vizio.com
Media: Jodie McAfee PR@vizio.com
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