What They Say
Vizio released its Q3 result and it highlighted that the firm made a gross profit of $57.3 million from its subscription and advertising services, compared to just $25.6 million on its sales of TV sets, which were down from 2.1 million last year to 1.6 million this time. It’s GP %age on subscriptions is 66% compared to just around 5.1% on its hardware set sales.
The firm boosted its active accounts to 14.4 million (up 35%) and its ‘SmartCast hours’ are up 16% to 3.6 billion. The ARPU was $19.89
Overall, the firm saw a los of 18.6 million compared to a profit of $35.1 million a year ago. Although sales of hardware dropped by 8%, gross profit droooed by 56%
The news saw a small bounce in the stock price which remains below its IPO price of last year.
What We Think
Vizio’s model was always based on slim margins on its hardware, so that’s not new, but this growth in profits from its advertising and media business is relatively new. A cloud on the horizon could be a legal action that claims that Vizio is in breach of GPL obligations. (BR)
