What Display Daily thinks: There may be a lot of good arguments to make for moving to a platform model instead of one that relies on hardware. Managing supply chains is a whole lot different from managing cloud services and micros-services. You can do it, given enough size, money and momentum, but that’s a lot to ask of any company but a very select few.
It wouldn’t be surprising to view the future of the TV market as being a few premium OEMs with full-formed software and platform offerings, and a lower tier of budget-friendly OEMs running Android TV or Fire TV. That squeezes out the Vizios of this world. They can keep their existing TV channels, but that’s as much about proving their platform models, as well as feeding them with the necessary partnerships with content and advertising providers.
Vizio’a Q3 Financials Point the Company in New Directions
Vizio reported its Q3’23 earnings results highlighting strong growth in Platform+ revenue and profitability driven by record levels of engagement on its SmartCast operating system.
Total revenue in Q3 was $426.2 million, down slightly from $435.0 million in the same quarter last year. However, Platform+ revenue, which includes Vizio’s advertising and data business, grew 22% YoY to $156.2 million. Overall gross profit rose 20% to $96.5 million, while net income soared 590% to $13.8 million compared to Q3’22.
Vizio credited its investments in enhancing the SmartCast user experience for driving record engagement metrics. SmartCast Hours streamed by users were up 21% YoY to 5.2 billion hours. Average revenue per user (ARPU) hit a new high of $31.55, a 14% increase compared to Q3’22.
“At Vizio, we continue to invest in delivering the best possible experience for our users and partners alike. Over the past few years, we have been continuously retooling and enhancing our operating system to unlock further growth opportunities,” said CEO William Wang.
The company also announced plans to explore partnerships with other TV OEMs interested in using its SmartCast software. With its expertise in integrated hardware and software, Vizio sees an opportunity to license SmartCast to other manufacturers looking for alternatives in the competitive CTV market.
For Q4’23, VIZIO expects to generate between $162-167 million in Platform+ revenue and $7-16 million in Adjusted EBITDA.
| Vizio Financials | Q3’23 | Q3’22 | % Change |
|---|---|---|---|
| Net Revenue | $426.2M | $435.0M | (2)% |
| Gross Profit | $96.5M | $80.1M | 20% |
| Operating Expenses | $83.8M | $75.4M | 11% |
| Net Income | $13.8M | $2.0M | 590% |
| Adjusted EBITDA | $26.9M | $16.7M | 61% |
| Smart TV Shipments | 1.1M | 1.2M | (8)% |
| SmartCast Active Accounts | 17.9M | 16.6M | 8% |
| Total VIZIO Hours | 8,913M | 8,129M | 10% |
| SmartCast Hours | 5,153M | 4,243M | 21% |
| SmartCast ARPU | $31.55 | $27.69 | 14% |
