VZIO - Earnings call transcript Q2 2022

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Michael Marks

Good afternoon and welcome to the VIZIO's Q2 2022 Earnings Call. I am Michael Marks, Director of Investor Relations.

Joining me for today's discussion are William Wang, our Founder and CEO; and Adam Townsend, our CFO. Also joining us for the Q&A portion of today's call is Michael O’Donnell, our Chief Revenue and Strategic Growth Officer. Please note that in addition to our earnings release and today’s remarks, a slide presentation can be found on our Investor Relations website at investors.vizio.com. and the certain in call statements statements involve to remind presentation are you that that you made risks refer third the slide and forward-looking I’ll uncertainties. on this could that These risks from forward-looking afternoon. was SEC our issued are statements and actual in to in detail with differ this these more cause discussed filings and materially results our that uncertainties the press release statements by to call We reflect that undertake revise no this required obligation occur except any as law. to after changes

call, GAAP the to discussed comparisons made otherwise in basis financial non-GAAP Note During on be also we non-GAAP will or Investors on remarks with a today’s information year-over-year release can the measures, refer website. Reconciliations that EBITDA. section found all the including earnings our specified. unless be in on financial measures quarterly adjusted this call most our comparable for of

I turn the call over William. to Now, will

William Wang

management proud which our environments I'm proven and we're challenges. with everyone. always focus importantly, Michael, of us strong as you, resilient. many just very as cycles has that in and joining uncertainty a XX that and and filled is and year on hello history particularly user endured well, but this now, Thank great we'll in efficiency, focused design, been discipline you for seasoned experiences, Thank has on business culture team our VIZIO of today. over to be great

XX% X% record the million, power our Despite dual a by pressures, results to million. our broader Our the built. by revenue $XXX which platform the business, led revenue showed second have of grew $XXX total grew our team we to quarter of leadership and model success marketplace

announced all to on superior to of great affordable we we comes Last and delivering the deliver products at focus and maintain with a use proud debt prices. because flexibilities. value and features deep operational efficiency. consumers, also balance I'm to sheet that and our combination which ease fact can We quarter to value of highly of liquid discipline continue of continue continue We no great a technology significant through focus on exceptional and number strong quickly TV selected country well. pricing strategy include the additional Building and around two expanded in selling our as competitive in That performing the TV at XX-inch number TV the as moves highly be that skills became strategic this quarter momentum, SKUs, it on model. D-Series XX-inch V-Series selling one our TV that in the we our And such model. to some pricing the second continues time like became country. to

the second during market, the two market quarter, two achievement quarter, tough outstanding one So us the which share the number the propel in U.S. best into number the help VIZIO the an market. selling in in TVs for number and position had

for Bluetooth Looking ahead, Wi-Fi system, of more the collection of and soundbars will feedback started headphones. include compatibility, has and TVs models stores Voice our and month support our tremendous. Remote responsive just VIZIO new new TV and last updated our to operating been an Many X hit

punch On M-Series compelling the a pack new audio price. and side, serious at our soundbars all-in-one Elevate a

tech new technology lineup. more and even are from to experience we living already design continue performance and like receiving publications of our the Our values and make enjoyable room Newsweeks, accolades touting enhancements reviewers the

and on joined Turning one integrated growing of VIZIO. experiences our that more into by viewing recently announced we'll to platforms, our our business, build the enhanced entertainment users. contents offering Platform+ bringing TikTok, fastest We continue to

favorable your on enjoy a can screen. much you dance video larger Now

a our Estrella range classic and offering also app kids, reality across content Media and including our with We categories, Spanish TV new expanded content language the of this lifestyle, cultures. with quarter broadened offering partnership

to quarter continues apps app this WatchFree+ as well all we most ad great are content move app to was deliver a ad-supported growth seeing free watched of promotion the in as The addition party power Once increasing showcases third building WatchFree+ to the our growth. platform. users again, supported of second strong the In WatchFree+ our offer, capabilities. we screen own on

content During of the quarter Vevo Network, we LOL Oliver the expanded Jamie the channels, and with WatchFree+ addition channel, anymore. music

our demand expanded also We Disney, library WatchFree+ with Warner from titles and Bros. on Sony,

has sports created offering a have from fans, multicultural families, audiences, and content gamers, to everyone many We truly for that something and kids more. for

in with as million, customers where all years, we we developed growth Account continued strong other streaming in successfully Active agency To content, Pfizer. and users Disney, base ad investment on the team. XX% two time year. have our quarter, streaming, grew ourselves spent growth align time platform, In and brands across grew times greater seeing big coverage SmartCast with our have as we ad repeat categories, on well sales particularly building this largest to the has This across to XX%. Microsoft XX segments. new We're once like streaming spend in advertiser hours this over up to That TVs. ad-supported our market Through mere invest SmartCast over engagement ad last outpace Apple, and led our Progressive, growth again,

financial few. thanks as continued growth we categories, across a And Our ad is retail rapidly, advertising relationships, in name such HP, have Caesars, NationWide [indiscernible], CPG. growing quarter, new in the up XX% develop business services, to Lowe's, and and Georgia-Pacific, categories, Little to to those second large

day, and consumers media our across on available. great advertisers biggest and our streaming new frequently best learn content millions and about have tell discovery partners studios what's Within to home of our CTV. and the services and the on That's for screen what's search we to on, product rely us of agree. we the our turn promote why what's video platform. power platform ad experience category, had And in their the entertainment to Every content

retain acquire valuable As to the streaming remains our continue a viewers. VIZIO and wars their to for content intensify, tool partners powerful

currently aggregate this running, the subscription our by fleet bring services. a majority their our partners out to We’ll of have collection, end our also take And a to hire we're to those commerce time way provide early to road. will our excited to all this partners. smart platform, quarter of and vast manage interactions to see devices. and August. layer payment capability the up We'll platform. rolling this our our popular Stars simple VIZIO our Account, major Discovery+ foundational down get some and across existing we're and the great TVs We as to capability We new bring needed opportunity launching the VIZIO Account launched and of new with Outside users and

early More Stars. in VIZIO Account. come by quarters very the subscriber activation are the We for results encouraged to on ahead

and still we're the So of very smart in to the our team earnings screen efficiency. bring continued TV the and we our on become. to We can larger new done, invest your always people, with early continues have hardware the to while what focus great journey, discipline And I possibilities progress home. a in software in investing as on remain the make the in believe we focused will

second advertisers, excited we More off are monetization dual a see a benefits our VIZIO, install Accounts, hand over more driving for what growing There’s With higher Adam model with base. with to for us. to of our Active quarter and SmartCast our holds that, revenue in more you content and As our leading quarter are more we play results, flywheel. seasoned to very providing the strong I’m work to and us overall review more still as paying turn to second really and the future to for expand more I call engagement, will strong to much detail. now come. values team the results can

Adam Townsend

William. Thanks

to a rose opening million. I’d to Starting Before our of total X%. represented which quarterly with outlook and The Platform revenue, to in for second at million in to company strong through XX% $XXX revenue $XX company driven of up the was highlights discuss $XXX our million and total by you financial call Plus XX% the like came quarterly advertising quarter. record grew the revenue quarter, growth XX% questions, take QX.

the gainer our To a some growing direct adding our quarter during emerging advertising continue expanded more part market relationships ago, net presence point, client than we year that to XXX market. and the ad of We continue advertisers. the in overall the within we expand believe we a secularly to share in a new macro environment, by softness versus despite be XX%

from growth largest big CPG. double-digit Our brands financial in spend is coming the repeat as sustained services, we saw direct key, client and their [ph] and relationships such is percentages. retail, growth as category ad The increase customers by

ACR recognize continue transparency, Our the proof-of-campaign expand them advertiser and on-screen are and data trust relationships our value built owned on validation and and outcomes. brands of direct-to-device give as to inventory

back party enhancing first planning was ago improve benefited campaign for an of better three our well data previously capabilities. experience by helps led announced versus our Today, our pricing revenue placement non-advertising with growth XX% strongest the Plus $XX advertising through in on our year-over-year year trends from in as licensing Platform brand as data, strong revenue This million we as the to control Nielsen remote of licensing deal the Speaking data and buttons. data grew user while on period. effectiveness targeting acceleration years,

their rely XXX, our reasons, who measurement ad products. currency our the data TVSquared such as also of of through to cornerstone becoming is licensing partners, our data on Nielsen these fuel VideoAmp, For Comscore, market all some the CTV iSpot, and

models to skews smart of was to offset to million share driven value our for sales TV certain $XXX Total in With during was this TV quarter. sales X% selling average promotions deployed revenue popular number quarter. improved market U.S. the two our $X.X shipments price Turning XX%. down the position strategic in Device on the lower the of segment. million unit Growth and pricing our by by of

gross margin. $XX was up with quarter. year-over-year gross profit now gross $XX profit a XX% million to company record Platform a XX% for profit. Turning Total Plus was the million

gross Platform For represented XX% Device million gross Plus of the profit margin. the profit with total. in came at X.X% $X a quarter

of marketing we growth competitive our exceptional million. million our consumers stronger Total The gross relative the lower value great improvement expand EBITDA on expectations platform the household company deliver strategy down ago. our Plus remain for pricing to and and profit. SG&A continue managed of Platform to a install our to focused more expenses, adjusted to $XX business, the quarter was Given and contribution from our to high base. year building attributable products was $XX slightly ahead and of margin expectations in Well

sheet to continue balance liquid no at up $XXX million, was a quarter-over-quarter. maintain ended debt. We Cash equivalents highly with quarter which the

turning performance metrics. key our to Now,

across growing the over XX% grew year ARPU Our QX monetization results continue success to to period. efforts $XX.XX to ago highlight of drive up record our platform. our the overall a

advertising as a video in revenue, where Our Hours SmartCast platform within monetization in all subsequent time streaming across the translated screen per times XX% home outpaced demand Active continues we streaming Hours XX% have increase again a to WatchFree+ spent saw to streaming benefit or the app spike disruptions. particularly we return hours strong by in X% VIZIO increase measured viewing pandemic also in overall hours. in total grew now our SmartCast into from to Total placement. users from sharp as in content spent a outpaced which lockdowns promotion growth also and platform. growth by SmartCast Account, This versus left ads growth growth other the Growth due

X.X new Looking million million. return a Active share gains viewing forward, streaming SmartCast we trends versus Accounts and normalize. expect of linear to XX.X as level XXX,XXX grew year-over-year record to to sequentially see

the all Against uncertainty this and backdrop, So, that managing companies, discipline quarter. the to cost let growth and we we business turn we ahead. resource balancing see and for support we third now are are heightened market expect and what for investment through me on challenges. focused Like opportunities

prudently significant while for there Platform a Plus extremely cost in about being our to we invest intend other areas disciplined of high in there growth Given margin company. business, the resources opportunity

productivity be will focus and on efficiencies identifying support profitability leverage. driving to Our and operating

licensing. data to at with pacing $XXX and video QX, to advertising with continued advertising screen well wildcard and predict. $XXX be between million million and growth expect home timing we revenue Platform Political as For quarter remains for the hard Plus as and

outlook, While we bring given predictability. our positioned within to significant believe remain political well its dollars, in we lower are we conservative

in a $XX implying be expect to Plus the XX% profit the gross we perspective, of the million Platform of million. $X adjusted $XX over From EBITDA margins million ranges. at expect of $XX be We to and QX company midpoint continued total range to between million

period. half fourth We continue quarter second leverage adjusted EBITDA expect from exceed seasonally strong to greater benefit half in to our as first operating we

team our while growth. disciplined remain to QX, results. term the are overall determination and focused in profitability on commitment to we let’s Operator? So, near turn with With we term continuing investing for pleased that, And generate of which the over long delivered solid question. call and

Operator

the [Operator question-and-answer will begin Thank Instructions] We session. now you.

Zangler The first question comes with from Nick Stephens.

open. line is Your

Nick Zangler

Hey on the guys congrats results, and VIZIO the Account. launch on congrats of

you’ve Now, forging additional Stars streaming VIZIO side, that for Account, the what streaming early others. amongst might got Discovery into partners? goes that I’m and imply on timing relationship? the Plus in VIZIO side these for launch curious what of the partners And some Account account partners, services

Michael O’Donnell

Hey just itself, excited right? it’s start I I’ll the Mike, We’re look, Yeah. Nick, about this. we’ll Well, pretty with Account take VIZIO rollout. think

future. we to market the track some is to to bring excited subscribe, just payments you we’re It’s the think we service partners. our able important single streaming consumers, I really place but come to starting And for manage were with a initial and launch on mentioned good results. think now, having for

total all platform we a now with or quarter of apps subscription Account. paid had XX% in VIZIO integrated roughly think are on apps, over about I our

So, the just I our features over We completed about building think XXX them the of good about as but actually we such ease we’ve recently for on momentum developer which Account. VIZIO got platform, attendees. that conference, had first we front. some educated benefits and VIZIO also And

we got partners start foreseeable expect the So, and a future. continue onboard at we’ve to for momentum good to the

Nick Zangler

though for current account to to of plans active VIZIO go Any Account? some cool. Very entice and your sign ahead up VIZIO users

Michael O’Donnell

compatible. fact one, is think the backwards of VIZIO it’s I that benefit the

rolling is new on but have. on we also SmartCast that only out, Account devices models not sell, VIZIO we So legacy

partners channels, we lot can them, we but with email, Account, utilizing of adoption. about VIZIO consumers got we’ll drive point tools help device partnerships social, we’ll be to So, believe, We of the normal sale, app on have. form educate really them, to and we’re the or obviously utilizing continue we and

for you today Stars. if For of on give use seven Stars and VIZIO and Account want in the example, go you platform, sign free to we to of offer VIZIO up an need days

think continuing with promotional market. new legacy only for the have we adoption to models benefits, for not to work we models, So, continue increase we’ll to drive but in our partners

Nick Zangler

don’t and up frame Great. positioning within could dollars you’re mind, Great. mentioned on One more I the if if here about associated Thank spend with you you. but contribution you capture that you could, political? XQ spend how ads since details more thinking if to guide, maybe any general it, ads just political your

Adam Townsend

Hey Nick, it’s Adam.

details and start, me Mike think Let I can get more here. some

closely we’re cadences. at said I we’re position in at looking able very a but political As very political. timelines be dollars dollars, We and around take less those political think sometimes in the come in, to prepared strong comments, to predictable

a we guidance been from comes be source of we've to very contribution that could So stronger in been significant about our assume and upside. political. thoughtful conservative Political than then in that anticipated

the as want you we're add color? cycle. pacing So any and it voting the that approach to we to going at watch of look Mike, But

Michael O’Donnell

Yes.

last XXXX, just were election business period, getting when started. think, in we launched real the I this we

capture but this we we're going able that to dollars, were first is some our real political So advertising cycle through.

about optimistic front the pretty we're opportunities us. have of we So in

think across I marketplace think to educate all political advertisers user our in our today, help large you lot the significant leverage platform, incremental including look that if we tools I out reach. adding have including categories, team We've terms we've sales from obviously a available And got in direct advertisers, base. can of of political. a XXXX growth active to different got

many well, know we only not we optimistic we're TV. into start of We're those really for the but political – we key enter there's really much obtain, as we really dollars think dollars Connected season how how positioned QX. but QX, into cautiously can So coming of about to

Nick Zangler

Congrats forward. good luck going and Awesome. guys,

Michael O’Donnell

Great. Thanks Nick.

Michael Marks

question. next Thanks Nick. Operator, we'll our take

Operator

Absolutely. The Martin with Needham. Please next question from comes proceed. Laura

Laura Martin

there. Hi

Okay.

So one William, you. philosophical with start a let's for

flow it profit through we margin, more. the just did So devices and gross line platform not subsidized because to added million business XX% with a we to the $XX

platform we second philosophical view basically going that is a that subsidize get just in be we're my So installed you the so that business, going the here? faster more is Is second installer? rank fast, devices to we make can you money base and Are theory television your as question. to basically, that have

William Wang

situation, From and on time, good in time decide we hiring invest do gross into sometimes price market what to margin? Yes, and Laura, Salesforce. we'll technology question. the to will sometimes depends in And we invest we're bigger, it sometimes going advertising stronger the increased with invest the

So to the [ph] in think during decided headwinds, outcome due retail in QX, our with I sure make inventory the – year really TV to this this challenges is environment. we macroeconomic the affordable

So idea And for money make for the is because if the money, will sets. long term in can, produce shareholder. just more that results the we And TV will subsidize shareholders. whole more we make better our

yes, a answer which pass revenue sales into offsetting additional We us. digital model. good profit, side question, can with generate year to gross is So for TV this a

Laura Martin

And that Disney And imminent That's tier, is driven and HBO its ad answer. just the ad said, December Netflix. in super helpful. do I the thing second tier it's the going sure has market to we driven have Xth like then an launch

do think think million streaming to ad those of you on your board, negotiated you have to deals the guys based cross I leverage come section deals you installed increase year cut like can of any latecomers these be of hurdle? those with the half Do negotiating better business? this you XX their VIZIO next sort tier as as on seen TVs? second And

Michael O’Donnell

major could XX over into talking million advertisers anything new partners I them have, And potentially think eyeballs, time that speak is into new distribution the advertising larger excited space. coming we good commitments active platform increase SmartCast. that's about but look don't any us. we'll devices to going that. spend or major really anything us, or I'll market. for I We the for that necessarily that think we're you're at a some long-term where on think to player about in said, think deals Anything drives Laura space the bring specific

going got So partners the it benefit how think help from or I it's subscription whatever services we fact lot our to an whether platform. we about of advertising And that the really share we've disposal. is but comment, our is to to grow understand on a standpoint, not stand supported ad where tools

audience ad supported has the have we for content. data an We that know appetite through a

we good think more and there's think I more partners more the more And there. So and space opportunities from to then come as eyeballs innovate. and into continue

We ways we from benefit we'll different ways think I have this. and in or a lot benefit lot make stand to a can different of money of

Laura Martin

Thanks very much.

Michael O’Donnell

Laura. you, Thank

Michael Marks

we next Operator, question. Laura. Thanks will take the

Operator

Thank you. with comes next Steven Wells question from The Cahall Fargo.

is open. line Your

Steven Cahall

asked. And nicely SmartCast joined you. I or covered already Thank is a this little up ARPU I has if been so late, apologize been really year-on-year.

think you kind where market your look of television market in in about focused make talk seeing some shape little else. little the could and seeing to screen I Thank even licensing on you're market on you're ARPU connected could share? where I development just product the unpack or against think pipeline then investments in weaker AVOD it if you're any was nice of particularly maybe of for you TV little the shipments, market the and seeing for sets gap maybe you're had in bit. home scatter trends just trends a maybe some us and parts you And anything talk Can closing about and share bit you. if some you're be programmatic your gains to data a I like sounds quarter. trends TV a there's peers wondering then the

Michael O’Donnell

in I'll ARPU. with on Yes, market trends regards touch the to

us within for seeing I sector. is we're the think the fastest where video growth

and We brands continue to grow our agencies. relationships with

two We continue or three platform. on watch is evangelize out to push app the number supported plus, which our ad

Inscape to our relationships on data video robust robust, data, increase which CPMs side. is with the to marketplace best most to the be our We and continue our set able the in increase leverage partners

order category, screen. what call non-medium soaring home our screened with we to KPIs. but success Media continues entertainment see leverage to clients entertainment drive or we've be continue home significantly a more in and grown are our to or non-endemic that key We to

consumers month. for series So, a were our for They gave new consumers, to quarter, rolled with example to around out to past was bring benefit a able with GEICO them pride opportunity VIZIO. campaign but of this sponsor to able we a content our advertise

and side, also the and us So for on We're the seeing fastest TAM grow connect generate off household those advertising platform. are some for us growing. more to continue important

on for trajectory growth terms advertising the that's in really ARPU the us. side, So of fastest

Adam Townsend

TV took quarter, pricing inch selling TV We the in number our strategies on think and the Steve, then the strong of into fact the into share a Yes. some it’s in inch number a we're strategy marketplace. two D itself Series vaulted And particularly that. that in and the volumes quarter, which presence to our you know Adam, for that has in has on one proud TV the speaks the selling in you'll fact, series, then actions I very attractive marketplace in VXX and success the value QX on that XX brand And became that to we expanded market. pricing speaks that gains it built first quickly VIZIO some the around in consumers. that

market. first selling remarks during had during both as quarter, the number the the one prepared during quarter TV number – So in second sorry, William the mentioned, two we the and

our value, to going to are results. similar and of types home share. We're for consumers models looking to that's VIZIO as that they're looking great possible look entertainment, in products could and continue coming look us that have for for helping solutions fleet So at strategy and other at and their great they're gain

year. we of And up the to number was something very we're how two quarter. for that to second back proud throughout going team is the position growth the into see moving So the to continue look drive

Steven Cahall

Great. Thank you.

Michael Marks

Piper question question. we'll Champion Steve. with take Thanks Operator, next Tom Sandler. Absolutely. Operator The from next comes the

is line Your open.

Tom Champion

you about also you're O’Donnell. what for and scatter evening. talk market Hi ad the can verticals guys. seeing the Maybe just on in strength. Mike, of Good just elaborate Mike

and think cited weakness. have I highlighted CPG verticals some you of retail those as

bucking here curious lower consumer. consumer supply the maybe Curious prices. your thoughts gas you. latest in and back a William, be trend just chain from bouncing why you're then little if Thank for curious the So, on bit the may

Michael O’Donnell

Yes.

some there's past. feeling no categories, doubt Tom, there's some we're just softness we're the working in a now including in in CPG. smaller So off marketplace the key and it right not base But because automotive

as know sales a evangelizing So to half invest now got and we're the two you in we only marketplace have. best years sales into there out this. the team in think the We've we We continued key right all team. capabilities

in able the advertisers were we I into we think on sales side the terms XXX alone fold. of add XX% new quarter, to direct So grew over advertisers new this

us, and the to for to we the scale, advertiser base. So the expect And and marketplace our our to withstand still continue of growing us for are and continue to, we that's base foreseeable scale pressure terms grow allowed in some future. of advertising in

William Wang

Yes.

demand the for the last team quarters. right our there's has where headwinds it's is – job thing supply not supply do and And a supply really great the over what chain, more a now. three was And chain For challenging chain macroeconomic the has managing dealing with done no your issues. really, to question on

that's price that, fall. And to improve the any to due but the the pretty so haven't gasoline hopeful situation, going continue overall seeing And lower really to significant gasoline far pickup we're prices. we

Tom Champion

a lot, it. guys. Thanks Got

Michael Marks

will next we question. the take Operator, Tom. Thanks,

Operator

Absolutely. Please The from next proceed. Kreyer Craig-Hallum. question comes Jason with

Jason Kreyer

VIZIO the what Great. for can share William, in you do you to has first economic guys. how strategically Maybe position you Thank can if performed about company cycles just past and gains? talk for downturn

William Wang

since as the known the industry. value Yes. Jason ever always has VIZIO TV – the been best in brand beginning

faster mentioned last price. of of last I the building for XX XX cost the delivered to a strong the over efficiency, also by years consistently be on So at With over and earlier, have done I'm focusing years, any team a proud great so management that this affordable season very really job proven we resilient. technology like

number During years USA the have TV XX one extremely And screen time. the maker revenue over in later, well, now added recession, we great and we the we that did become business model. during in fact, our dual flat

was the strong dual a So really management sheet of. season which model, balance combination really so proud revenue strong I'm a of and team,

are We macroeconomics take to we're so headwinds, kind of ready ready. on any

Jason Kreyer

any assume And follow I process as takeaways now. wrapped up you've you've notable the upfront Okay. then up from by a that just

William Wang

we're ready think a necessarily don't share I to number.

We wrapping our What upfronts think I are share last on still be up can the, the I will the over we – up is significantly year. end.

we're, deals great and continue think have closed, some more in some marketplace we've had we've we great I conversations brands. the to even onboard some to

core it, So XXXX. share ready to significantly be growing number, that a us but exactly not and can will year-over-year share up to it in

Jason Kreyer

All right. Thanks guys.

Michael Marks

Thanks, the Jason. Operator, we will take next question.

Operator

Barrington Research. Absolutely. The Goss next question comes with Jim from

line Your is open.

Jim Goss

something Adam employing and process? fit of looks the one a earlier a I to terms of targeting pattern at It usage Do the was best XX-inch about continue certain, this you've done have couple, least mind continue try of two you you a like be that and Got certain might available? wanted and in terms I you being the users that a D-series Do number on that think couple. talking XX-inch in to rolling platform sets. categories in out, build think different about to process you. the V-series just you have Thank strategy one might gaining

Adam Townsend

Jim. Thanks, Yes.

TV levels series. we do So, the of one extensive usage data the the is having by we that us of know by benefits

units your for a have us. of tend of what index ARPU we for to sense engagement in over So terms opportunities and therefore

about we pricing. which in units our goes to into be aggressive that want And with so thinking more

to sell and coincidence not XX two unit. with of lot to started highly of there's V-series your main it's a TV about, engaged be a that, our We it's likely so very we things customers. home of lot a a cases, that in unit. a pertain lot that to question And the exact that it's the It's them in

because growing volume engaged move are willing information, that They use right accounts the best knowing flywheel so tend occurs. to that us feeds our aggressively more engaged of to monetization our were accounts, the WatchFree+ They're very and platform. it to and accounts And that's active price streaming. active more highly with active we right into units using where

how So our usage strategies translate connection our pricing a ARPU is it into opportunity. is, trends there and the between

Jim Goss

Okay.

so so do you there this, think And it you another is consumers months point, something TV, your the, people next margins unit thing. of no that on and let to to not move known those push as totally sort to the on say, sale hardware, couple the this it be some encourages be trash before and the that longer the the of on else, we might and at sales let models rotate you then

William Wang

nature, of Yes, throughout ensure fairly work But things so Friday, Black closely closely promotion we schedule the effort broad. do partners that that a events, is opportunities put that And place. fleet on merchandising our into look right? our look We work activities at we retail the around to and that timelines we with very on very we selling in that. mind, keep year

higher talked that. a we if very margin, couple like much of for skews, margins we've skews these a take lower here, other so And are generating, about example targeted on to

averaging generate business. those in willing generating be our revenue basis; the ARPU blended $XX stream are somewhere get gross dual life for valuable once to seven in the margin TV profit the manage the customer talking we some over these per you as model TV average. we're to years, the that unit recurring our from back they're said, being see and useful profit on All incredibly a that that or low that. unit units help with value on revenue contribution of a us. a homes we units indexing because so strategically, at on lifetime six we're of ARPU here from So that model about And and can sales, gross TV as higher units to overall point now, we're and high comes is around of The

we're that now want of to scaled incredibly drive works so onset margin up that the selling margin a where we then And lean a And at into unit have approach. a level platform to, business, at high well. to strategy to low

Jim Goss

sort you And value could spoke a increase legacy of way the Okay. and the within and sort household. How important And VIZIO that it? multi to is promote of other you be therefore the household about within households. effort that, to ARPU you do TV and increase the usage in that how one televisions potential that a that

William Wang

it's features new experience make we We bringing to and hopefully as than the other meeting the our just our them We right? TVs they're better to value important, see want a to needs, competitors. streaming overall platform, we're think VIZIO whole home household. in much continue want that units, that, in capabilities to that that bringing right? I adding And then to their do have consumers what solution, SmartCast Yes,

enhance great meeting of to products. make so part is data plug-in consumers go that it need a sure thinking our device our needs. the using user stay output so dongle of value We're to platform. they they their And to great there's on overall kind get what want, no highly and have the a or when experience, that are to we're the discovery priced that content and their search great they seen want engaged bringing We're any

add be consumers and units continue love to their we'd VIZIO to absolutely primary their see entertainment have source. So in home more

Jim Goss

Okay. Thanks.

William Wang

Thanks Jim.

Michael Marks

we Thanks one for have Jim. Operator, time more question.

Operator

Karasyov is from with Vasily proceed. question Research. final Cannonball Please The Absolutely.

Vasily Karasyov

I afternoon. downturn. Good a philosophy about your question have macro into you. potential going a Thank

revenue the So accelerate and pull that's been, growing bull CPMs people here. expected your part the you has have for and of advertising to units lever faces

increase saw you the would? to go obtain you in for lower a hold very CPMs able sell much. a would that demand, up softening have through, or but accept been higher sell-through, CPM and would you Thank you some give If you

William Wang

Yes.

the a function I in Television. CPMs there there a really business best really CPMs, softness think Connected this supply we there's now have the that be in I marketplace, And of we've as continues are to strong demand to for but We've we marketplace. be continues the mentioned, space. player are in data And and with right built demand. core WatchFree+ a think

We UI the for entertainment have marketplace. in median we have community; for search the discovery the best and

We growth CPM So upside to our CPMs. the believe continued on not is reduce side. and today there's still strategy

Vasily Karasyov

you. Thank

Michael Marks

joining. today's everyone call. thanks Have This evening. And concludes a great Vasily. Thanks for

Operator

you call. This your XXXX Thank for VIZIO, Inc earnings concludes QX the participation.

your now may You disconnect line.

Vizio Holding (VZIO) 11 Aug 222022 Q2 Earnings call transcript