Platform+ net revenue increased 97%
year-over-year (YoY) to $102.6 million
Platform+ gross profit increased 69% YoY to
$64.9 million
Average Revenue Per User increased 64% YoY to
$23.68
VIZIO Holding Corp. (NYSE: VZIO) today announced
the following results for the three months ended March 31, 2022, as
compared to the corresponding period of last year:
Financial and operational highlights include:
- Net revenue of $485.5 million, compared to $505.7 million
- Platform+ net revenue of $102.6 million, up 97%
- Gross profit of $72.8 million, compared to $86.7 million
- Platform+ gross profit of $64.9 million, up 69%
- Net loss of $11.0 million, compared to net income of $3.4
million
- Adjusted EBITDA of $4.4 million, compared to $40.4 million
- SmartCast Active Accounts of 15.6 million, up 16%
- SmartCast Hours of 4.1 billion, up 14%
- Average Revenue Per User (ARPU) of $23.68, up 64%
“I am extremely proud of our exceptional first quarter results.
It has been 20 years since VIZIO first revolutionized the TV
marketplace. We were the first to offer affordable HDTVs, Smart TVs
and 6 years ago we launched our own operating system,” said William
Wang, CEO of VIZIO. “Today, that investment continues to pay off
and I am happy to announce that our high-margin Platform+ revenue
grew 97% year-over-year in Q1. Our dual revenue model gives us the
opportunity to invest in our award-winning consumer products, while
also delivering continued advertising revenue growth.”
Business highlights include:
- #1 TV and sound bar shelf share at Walmart and Target1
- 50'' V-Series model was the #1 selling 4K TV in US during
Q1'222
- Increased mid-size (43"-58") units shipped by 40% from
Q1'21
- Received CES 2022 Innovation Awards for TV (M Series X), Audio
(Elevate) and our operating system
- 23% increase in TV shipments versus pre-pandemic Q1'19
- Advertising revenue grew 116% versus Q1'21
- App launches included Sling TV, Amazon Music, Chicken Soup for
the Soul, Daily Wire, and Us Weekly
Selected Quarterly Financial
Results
(Unaudited, in millions, except
percentages and ARPU)
Three Months Ended
March 31,
2022
2021
% Change
Financial
Highlights
Net Revenue
Device
$
382.9
$
453.5
(16
)%
Platform+
102.6
52.2
97
%
Total Net Revenue
485.5
505.7
(4
)%
Gross Profit
Device
7.9
48.3
(84
)%
Platform+
64.9
38.4
69
%
Total Gross Profit
72.8
86.7
(16
)%
Operating Expenses
85.7
72.9
18
%
Net (Loss) Income
$
(11.0
)
$
3.4
(424
)%
Adjusted EBITDA3
$
4.4
$
40.4
(89
)%
Operational
Metrics
Smart TV Shipments
1.4
1.5
(11
)%
SmartCast Active Accounts (as of)
15.6
13.5
16
%
Total VIZIO Hours
8,208
6,951
18
%
SmartCast Hours
4,116
3,622
14
%
SmartCast ARPU
$
23.68
$
14.43
64
%
(1)
According to gap intelligence's
Televisions and Sound Bars Pricing & Promotion Report, March
2022
(2)
The NPD Group/Retail Tracking Service,
based on unit sales, Jan.- Mar. 2022 combined
(3)
A reconciliation of Net (Loss) Income to
Adjusted EBITDA is provided below
Financial Outlook
(In millions)
Second Quarter 2022
Platform+ Net Revenue
$107 - $111
Platform+ Gross Profit
$66 - $69
Adjusted EBITDA
$3 - $7
Virtual Investor Event – Thursday, May 12, 2022
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 July 1, 2022, at 11:59 p.m. (ET).
About VIZIO
Founded and headquartered in Orange County, California, our
mission at VIZIO Holding Corp. (NYSE: VZIO) is to deliver immersive
entertainment and compelling lifestyle enhancements that make our
products the center of the connected home. We are driving the
future of televisions through our integrated platform of
cutting-edge Smart TVs and powerful operating system. We also offer
a portfolio of innovative sound bars that deliver consumers an
elevated audio experience. Our platform gives content providers
more ways to distribute their content and advertisers more tools to
connect with the right audience.
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 (loss) income before
interest income, net, other income (expense), net, provision for
(benefit from) 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 (loss) 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 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
(loss) income.
We compensate for these limitations by providing a
reconciliation of Adjusted EBITDA to net (loss) income. We
encourage investors and others not to rely on any single financial
measure and to view Adjusted EBITDA in conjunction with net (loss)
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 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.
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 Annual Report on Form 10-K for
the year ended December 31, 2021, as filed on March 10, 2022.
Additional information will be available in our Quarterly Report on
Form 10-Q for the three months ended March 31, 2022. 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.
Source: VIZIO Holding Corp.
Condensed Consolidated
Statements of Operations
(Unaudited, in millions except
per share amounts)
Three Months Ended
March 31,
2022
2021
Net revenue:
Device
$
382.9
$
453.5
Platform+
102.6
52.2
Total net revenue
485.5
505.7
Cost of goods sold:
Device
375.0
405.2
Platform+
37.7
13.8
Total cost of goods sold
412.7
419.0
Gross profit:
Device
7.9
48.3
Platform+
64.9
38.4
Total gross profit
72.8
86.7
Operating expenses:
Selling, general and administrative
62.4
58.1
Marketing
13.3
4.4
Research and development
9.2
9.8
Depreciation and amortization
0.8
0.6
Total operating expenses
85.7
72.9
Income (loss) from operations
(12.9
)
13.8
Interest income, net
—
0.1
Other income (expense), net
—
(0.2
)
Total non-operating income (expense),
net
—
(0.1
)
Income (loss) before income taxes
(12.9
)
13.7
Provision for (benefit from) income
taxes
(1.9
)
10.3
Net (loss) income
$
(11.0
)
$
3.4
Net (loss) income attributable to Class A
and Class B stockholders:
Basic
$
(0.06
)
$
0.02
Diluted
$
(0.06
)
$
0.02
Weighted-average Class A and Class B
common shares outstanding:
Basic
191.2
145.7
Diluted
191.2
157.2
Condensed Consolidated Balance
Sheets
(Unaudited, in millions except
per share amounts)
March 31,
2022
December 31,
2021
Assets
Current assets: Cash and cash equivalents
$
309.7
$
331.6
Accounts receivable, net
321.0
375.1
Other receivables due from related parties
2.1
5.1
Inventories
12.2
11.9
Income tax receivable
29.2
26.2
Other current assets
84.6
84.8
Total current assets
758.8
834.7
Property, equipment and software, net
13.6
10.3
Goodwill, net
44.8
44.8
Deferred income taxes
30.4
30.4
Other assets
19.2
15.6
Total assets
$
866.8
$
935.8
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable due to related parties
$
153.8
$
224.8
Accounts payable
144.9
118.9
Accrued expenses
169.7
185.8
Accrued royalties
47.2
56.8
Other current liabilities
5.4
4.8
Total current liabilities
521.0
591.1
Other long-term liabilities
16.4
14.1
Total liabilities
537.4
605.2
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100.0 shares authorized and no
shares issued and outstanding as of March 31, 2022 and December 31,
2021, respectively.
—
—
Common stock, $0.0001 par value; 1,350.0 shares authorized as of
March 31, 2022 and December 31, 2021, respectively, with the
following issued and outstanding by class:
•
Class A, 119.6 and 116.4 shares issued and
115.8 and 113.2 outstanding as of March 31, 2022 and December 31,
2021, respectively,
•
Class B, 76.8 shares issued and
outstanding as of March 31, 2022 and December 31, 2021,
respectively, and
•
Class C, no shares issued and outstanding
as of March 31, 2022 and December 31, 2021, respectively.
—
—
Additional paid-in capital
333.1
323.3
Accumulated other comprehensive loss
(0.2
)
(0.2
)
Retained earnings (accumulated deficit)
(3.5
)
7.5
Total stockholders’ equity
329.4
330.6
Total liabilities and stockholders' equity
$
866.8
$
935.8
Condensed Consolidated
Statements of Cash Flows
(Unaudited, in millions)
Three Months Ended March
31,
2022
2021
Cash flows from operating activities:
Net (loss) income
$
(11.0
)
$
3.4
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization
0.8
0.6
Deferred income taxes
—
1.2
Share-based compensation expense
16.5
26.0
Change in allowance for doubtful
accounts
3.1
—
Changes in operating assets and
liabilities:
Accounts receivable
51.0
157.1
Other receivables due from related
parties
3.0
0.2
Inventories
(0.3
)
0.8
Income taxes receivable
(3.0
)
1.3
Other current assets
0.1
(1.3
)
Other assets
(2.8
)
0.6
Accounts payable due to related
parties
(71.0
)
(49.7
)
Accounts payable
26.0
(38.2
)
Accrued expenses
(16.1
)
(19.7
)
Accrued royalties
(9.6
)
(3.9
)
Income taxes payable
—
6.8
Other current liabilities
0.5
—
Other long-term liabilities
2.3
(0.4
)
Net cash (used in) provided by operating
activities
(10.5
)
84.8
Cash flows from investing activities:
Purchase of property and equipment
(4.0
)
(2.3
)
Purchase of investments
(0.7
)
—
Net cash used in investing activities
(4.7
)
(2.3
)
Cash flows from financing activities:
Proceeds from the exercise of stock
options
5.2
—
Payment of dividends on Series A
convertible preferred stock
—
(0.6
)
Proceeds from IPO, net of $10.7 in direct
offering costs
—
148.0
Payments of other offering costs
—
(1.4
)
Withholding taxes paid on behalf of
employees on net settled share-based awards
(11.9
)
—
Net cash (used in) provided by financing
activities
(6.7
)
146.0
Effects of exchange rate changes on cash
and cash equivalents
—
(1.1
)
Net (decrease) increase in cash and cash
equivalents
(21.9
)
227.4
Cash and cash equivalents at beginning of
period
331.6
207.7
Cash and cash equivalents at end of
period
$
309.7
$
435.1
Supplemental disclosure of cash flow
information:
Cash paid for income taxes
$
0.9
$
0.1
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
$
3.5
$
—
Cash paid for amounts included in the
measurement of operating lease liabilities
$
0.8
$
0.7
Payment to taxing authority in connection
with shares directly withheld from employees not yet made
$
—
$
9.1
IPO costs not yet paid
$
—
$
1.7
Reconciliation of Net (Loss) Income to
Adjusted EBITDA
Three Months Ended
March 31,
2022
2021
(Unaudited, in millions)
Net (loss) income
$
(11.0
)
$
3.4
Adjusted to exclude the following:
Interest income, net
—
(0.1
)
Other income (expense), net
—
0.2
Provision for (benefit from) income
taxes
(1.9
)
10.3
Depreciation and amortization
0.8
0.6
Share-based compensation
16.5
26.0
Adjusted EBITDA
$
4.4
$
40.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220511006141/en/
Investors and Analysts: Michael Marks IR@vizio.com
Media: Jodie McAfee PR@vizio.com
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