Earnings call transcript Q1 2023

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Michael Marks

Good afternoon, and welcome to VIZIO's Q1 '23 Earnings Call. I'm 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. second the certain in call and statements statements risks our to remind presentation including uncertainties. functionality you relationships and forward-looking about that advertising statements demand you made expected products and refer future third product for the slide and certain and customer I'll partners, results, our rollouts are quarter on involve this that more statements issued detail release results and our to cause differ are uncertainties discussed these from that risks the in These with actual forward-looking in press filings SEC this that materially our could and afternoon. was undertake call, statements to except We reflect this by revise required after law. occur obligation no as to changes any that

operational earnings GAAP of quarterly comparisons call, the applicable, refer found the During release, we related be XXXX of and all in on remarks our today's well for measures, measures metrics to metrics. also definitions including information further be Reconciliations as financial to this most be call will all financial guidance, on reported to Note and information today's and otherwise a end as as on or Investors our made website. QX discussed metrics which the call comparable section basis the in QX non-GAAP that and financial of non-GAAP certain adjusted EBITDA XXXX for is year-over-year unless as on specified. can

Now I William. the to turn will over call

William Wang

and of the us in of see funds, you environment of Thank to XXXX. to experiences, hardware little joining in selling, the software the we and end the marketplace, everyone. today. macro products the across strategy. towards many, XXst in multiple resulted and was it kicked a affordable and hello, year, and broader particularly success surprise combined for Michael, you, execution award-winning Last challenge personnel off uncertainty economy pressure QX advertising Thank our year our continue on

in strength to year-over-year, delivered our results QX, upside advertising which business expectations. As against show see today, our from can our up you continued XX%

marketplace, results have awareness they speak destination these the we to improvement of speak in for a advertisers increasing viewers. also While VIZIO as skilled the of progress some reach to general made

our areas we'll marketplace. of advertising gain one connected share within By TV, fastest-growing of measure, the to continue

share dollars away linear that TV, continue as to growth viewer As and shift VIZIO remain from confident well be to we will benefit. positioned

our clients growing been of service presentation have host in launching week, business quick new NewFronts a between media like virtual the with where our and rapidly pharmaceuticals, verticals connect and us. an providers restaurants, for we advertising XXXX, to can VIZIO and showcased we broadened partners, Last welcomed audience, our the travel third advertisers of and advertising innovative which have brands at in-person and all X,XXX Since category close audience. content IAB beyond we entertainment just to ways recently

We of create new inventory and manage campaign units, more returns. ad have advertisers offer introduced advertising for which functionality sponsorship attractive directly opportunities, to all and us

total Our building a million time high of time spent system base operating nearly active continues of increase of our market, hitting content. to our XX% spent user streaming new TV on XX on

with audiences expand partners reach a content beyond to can the traditional experience buying robust combining engagement automated improve and and the By data, deeper specific viewer help recognition effectively. ad we Inscape quickly

a to interest our Using reach to as company TV most help VIZIO in one [card]. buying distinct formats identified experience. ACR ad ads company turned recently relevant different its an deliver viewers to connected audiences automotive across the automotive data, TV more instance, For to example, expand

the This Emmy would entertainment of use award our couple Technology Emmy better ACR to to weeks the experiences our for our of for millions deliver advances Awards. behalf A VIZIO innovative had to Annual of ago, I the team, viewers. team an testament has take Engineering that made of I XXth say technology. of attending not privilege home is & a On

expand monetization and this, content we By for advertising doing our also clients.

our content offerings improved of experience. bring Speaking experiences, and we expanded want what with continue streaming of consumers to more they

we app navigate to mobile to quarter, enhancements consumer user choices interface made many in in the the today. During our easily streaming available help

watched continue We remains the #X which WatchFree+, expand to ad-supported most app platform. free

WatchFree+. VIZIO free shift great for the great continue consumption content position our benefit, as to on all streaming and is in services to from great look consumers the reap [study] like their habits own

streaming quarter, XXX the XX The AMC smart bringing VIZIO's more films. the TVs. Networks, and addition AMC+ we programming During of with to feature even the over on-demand partnership recent premium partnership expanded channels expanded app, our includes

This partners have on almost quarter, across genres. apps we many from Animal XXX we and Today, OWN, SiriusXM, Destination our also expanded apps streaming entertainment like many providing more. platform, our Planet, built-in built-in America streaming

Turning segment. to our device

the well We remains are environment high award-winning demand and the market, curve. to seasoned our slow economy that, constraint, inflation. continue given of an a challenging to ahead navigating deliver a that team remains and the backdrop we'll of product Despite

value we best the said, devices in been continue quality the even The publisher emerge to will leader the the of budget gets pack. award-winning they success our business revenue model, to we when compare leading recently when side-by-side, dual products, TVs consumer never technology our innovation as elevate further. invest of A our has Thanks we picture to greater. VIZIO's

make our and by and to entrepreneurial investments strategic experience we our an TV plan driven better to consumers. continue are support VIZIO, to for At affordable spirit

centered culture with a profitability. that balances is growth company around disciplined Our

liquid continue debt, highly We balance strong essential no and remains maintain sheet with which an to advantage. a

long-term dual consumers, to better installed We for remain our enable base leveraging and key our shareholders. on the sustainable increase focused will model priorities growth deliver our that our to revenue business us serve

efficiency, us with and well right will as conditions the discipline serve of market improve. model along team, Our

results turn that, review more Adam the will detail. quarter With to in I call to our first over

Adam Townsend

William. Thanks,

I Before opening you discuss will QX. questions, first our results and for the our through take quarter call to outlook

Our first model. advantage quarter results of revenue highlight our a key dual

to result profit gross the overall growth revenue expanding our challenged, upside remains market in our platform drove market presence for device the quarter. in to advertising the high-margin While

Taken together, $XX profit down X% XX%, came at in grew gross $XXX total million. while company revenue million, to total

XX% of XX% new provide of Plus $XXX revenue I total some profit. consolidated XX% a high Platform Plus to segment-level start revenue million. additional platform Advertising revenue context, Total million. $XX XX% rose grew and Plus. will gross to To Platform with represented

Throughout the of quarter, we improvement saw strong a user a and combination video deeper steady demand. growth in which from benefited engagement in advertising revenue,

with as which streaming new users increase percent high quarter. hours as continue measured SmartCast of hours, to by spent reached Our our during total a of VIZIO the XX% time environment a

of impressions, SmartCast game than our time This SmartCast is attached behavior consoles spend media on cable our on They players most more directly differently, users within or TV our TV, representing advertising, the screen advertising for spending our are their multiple ways, time the monetization Plus Said XX% Among streaming platform. combined. is opportunities total increasing content quarter. the largest far Platform these, data our distribution. content including of our and in revenue, component by home video of

strong And in QX, delivered another of ad of growth we quarter XX%.

with the quarter, the by worked returning spend XX% number new the also their XX%, other prior they have we adding of expanded with brands advertisers, year During by grew we net period. versus advertisers. us XXX In

advertisers new platforms again with gained the combination of we in among more us time they with here, advertisers of XX% CTV powerful spending once are first existing users a share advertising more platform more and once our through coming streaming, money more we to growth our quarter. So spending believe

TV revenue revenue revenue nonadvertising Data XX% Platform healthy shipments. due in within distribution by showed fewer Our Plus million. up to was partially to and growth, button offset also $XX content decline growth a

device our Total to $XXX segment. Turning million. revenue was

to XX% continued shipments Given demand the over consumer for relatively full and challenges declined quarter. just supply, retail $XXX,XXX TV

company the ago EBITDA million, quarter Total XX% period. up the year was adjusted for $X over

management continuing SG&A invest capabilities managing in We remain to reinvest new and back into features focused vigilant allow drive to to the on to us future plan As operational while to previously, user we to support deeper engagement. have expenses stated drive and business we efficiencies competitiveness remain growth. in our and expense

metrics. Now turning performance key to our

our as XX% XX% total QX year hours over and over record. in monetization our Total outpaced streaming SmartCast time our growing times in of all increase period spent VIZIO ARPU the by the hours. drive a grew ago XX% efforts SmartCast success spent users measured by results overall new against to increase just also highlight other a up $XX, Our to across a platform.

in SmartCast highest user continues quarter increase. hours we started was lockdowns and per account ability of XXXX personalization active our time engagement, spent before just support and to a grew content continued for the first fourth XXXX. enhanced consecutive that to and the the helps lap quarter COVID-related monetizable data-driven content grow With since to

to SmartCast million account a little grew a Our base new X.X over year-over-year record XX.X million. active

we that, quarter. expect now second let me So what for to with the turn

growth remain is in large by particularly service We by pharma, from are and advertising and We category, as activity, reflected entertainment outlook. the regarding travel the restaurants. that and quick in resurgence media such encouraged categories our cautious

While weighted deliver M&E for screen we activity the we of rate of overall do in sponsorship overall wider expect growth in will we to opportunities growth be to QX, a brands, revenue clients. expect expanded have as range still home heavily from

million, So for growth midpoint. in the QX, our and business rate growth at representing come This implies versus to the first we expect between also in quarter. XX% accelerated Platform $XXX advertising an million Plus $XXX revenue

of the certain margin expected margin Plus of sequential improvement representing to against scale The reduced gross profit the in fixed QX. that a be costs mix greater net $XX margin to ad video anticipated operating an higher of revenue We expect million includes Platform $XX at million, XX% midpoint. and our

a with expect about a ad business deliver we opportunity the encouraged of viewing continue to closing, support to same commitment we to are this momentum. with years a in being increase as efficiency, innings time, our as in early to to EBITDA seamless remain $XX of to accelerated vast major the forward to excited a of continuing competitive by adoption the our finally, possibilities discipline, support expect few We and with million that advertising CTV our impactful considerable old, ahead. opportunities lie see total In relevant range TV acquisition. we we the customer tailwind And its productivity experience business. look activities to are the our pricing clients we platform company campaigns. million to only At consumers and and and With adjusted $X strategically

questions. With to that, Operator? let's the open call

Operator

today for question Our Laura Martin Needham. first of from comes Instructions] [Operator

Laura Martin

is on question first devices. My

So William, down worst revenue eighth XX%. device it's and is has this where year-over-year, been the negative the negative, quarter

just So see you being growth? headwind see wars do to the sight in is, -- worse? And are end devices you any of a question my price do getting any

with I part were we pricing reasons on Do And willing device a value? value we we my on prices. first are have Because in today? know take of devices lifetime to that point, positive lower question. the That's these B, one specific positive still Adam, this still was lifetime like

William Wang

William be space. in hottest future, wants to part We're the that be obviously glad and CTV everyone of a so the market the here. and future. will we're we're Laura, in space the CTV advertising in

and business, times many We cycle the there have this that new know, been of through our the and wars long as are for entrants. we've are in especially nature been seeing a business Price when time you now, history.

our [quite] Just in we well-balanced to we in price war points strategic about like and how and approach take disciplined to be can our deliver thought we to be consumers. price so maximize will extremely return our previous our of our value shareholders history,

and our outperformed Adam? dual as to QX, And environment, disciplined challenging business extremely and our we expectations. experienced the an team. under our Using thanks model example, revenue internal

Adam Townsend

look business, can't modestly, look at Yes, in the the the your ARPU. sure, right? gross quarter to that of you absolutely, at Laura, in profit up But if question, was sure. absence you the device

that the the our of $XX. costs point that if now goes the -- usage television, that with But that breakeven acquisition of kind ARPU is generating And our of that's the So are level. unit. being, customer at we're if approaching lifetime

seeing market with And NPV back, and very a the so about still the acquiring we're these positive out value in pricings it think you competition discount customer. and are the a on aggressive customer when lifetime even that

pleased We're made. positioning. the So progress we're we've pleased our monetization with with

seeing quarter. in You're XX% the outperformance. grew in it our advertising We

our of some think closer different. or to I peers were flat

continue the So and It's to growth to we're in product. households want is overall pretty execution and team, a pleased really competitive paying the have with drive there. off, we

Operator

Stanley. Swinburne question of comes Ben Our next Morgan from

Ben Swinburne

you wanted the I There acceleration lot advertising Obviously, in discussion you January, QX, QX. in ask sure programmatic, a weakness of was trends. healthy around about in back to as remember February.

anything you you engagement wondering bit us statistics you're could on a little versus of can driving sort look talk then programmatic across there's the any So I'm I'm of And out today? WatchFree+, growth mentioned as how the seeing if half if a is with what the sitting share at year you or in wondering here -- product advertising on and platform? that first you But that deeper direct? performing engagement

Michael O’Donnell

Yes, I'll take the advertising question.

the on numbers, in saw a based think QX. definitely rebound I we

was I February We're heading challenging the good of and think a little a into very not us. that January really rebound, in that space. We also saw market, started soft. signs a up trajectory of optimistic about programmatic programmatic for seeing good but the was QX only in kind month March. space. cautiously especially in the March direct in out space but ramp QX,

versus our is community. think way is I sold of our open think and is direct exchange makeup DSPs. the And look think of I XX% we've open real-time at And And one-to-one bidding or said with you programmatic, I direct versus advertiser marketplace open marketplace. our relationships about when past kind it about with the business of the we SSPs in XX% other direct think

seen well. So very rebound we've both

us. I the and in growth verticals all we've pointed Adam another seen the for key across think to comments, new as XXX mix, advertisers out added we

Adam Townsend

is we destination we're the our very monetize. supported it's in advertising. WatchFree+, in that's we on yet that don't free as pleased with the the out a to growth of our WatchFree+, Yes, growth the terms break metrics directly Ben, -- know, that's continued largest contributor is It but key we platform the where second ad and specifically on and

across continued of about other that it And drive better done, continued to think our when on the fact growth. activity to streaming to has you it, WatchFree+ the functionality we've component experience. is that of platform offerings outpace core a make ability so And a enhance user we've the what

and additional Just including Portlandia in names Sports and Zone. this we like added quarter Tastemade alone, Home channels, XX MSG

of to a there's also in We've lot AVOD our consumers. bringing capabilities. we're variety So what bolstered

continues drive certainly people And available what's We that so and We suggests that to of they're it for screen as to and why aware promotion use you combine our shows make a them. overall experience, data. user home that it use platform into sure grow. content

key to we and to make So as continue in our and overall, it's really a forward. growth we'll enhancements advertising, go component refinements

Operator

question next Vasily Our from Cannonball from Research. comes Karasyov

Vasily Karasyov

Michael, of your ask sell directly, kind that's to what of of give in I sales maybe how into little you us now inventory the manage go how evolved wanted And right understanding process in topic a a little terms and sell sold of you where of to at more dramatically. you programmatically XX% more our what detail you time inventory of least? over a it's going community interest as kind

What some the would it's programmatic, fully And that describe confusing marketplaces. referred private correct from the be programmatics, to you decision sometimes as also us sold What outside. this? through looking as open describe for through auctions to terminology, programmatic i.e. --

appreciate here? educating process would I your So process your on on sales you us thought

Michael O’Donnell

Yes, definitely, Vasily.

to question, but answer [indiscernible] need to I'll simplify this do think I it. I my best

we X. So revenue look our streams side, at advertising have you the on if

screen home Home and direct service. sold have XXX% display screen is itself We managed a via video.

So home nothing our relationships. programmatic with screen today

of video, advertisers in marketplace. it's For as explained, relationships XX-XX with direct sold, versus XX% the just I open X-to-X terms

within Now XX%, through of spend about XX% comes a that that in DSP.

have through transacted -- we DSP. with So

any through We that advertisers So our as maintained flexibility. like. opportunity the beginning, they to we've DSP the from to said server ad work want give we've or

today, marketplace. a higher And strategy programmatic business is or those than the direct you direct part clearing a the at capacity at So of business we much from will look CPMs open transact in overall sold marketplace direct private if a as relationships. perspective,

that the CTV growth, in of space. I think, to new is Part

lot a education. of think I still there's

the direct core WatchFree+ the seeing kind data getting of the could CPMs to products we're audience or have, they think data, team drive higher in helped or differentiated sales we us first-party out seeing than within viewing differentiated unique exchange the evangelize our the marketplace. screen, I has today at open deliver we're open home

Vasily Karasyov

comparable for inventory. to at way it? look that's the that And right Interesting. Is

Michael O’Donnell

across which supply as the of That's on we apps the Yes. partner is have revenue against the or inventory shares have, WatchFree+ as we platform. mix well

the it's prioritization. And So down it supply. Vasily, when to, comes really, same is

not We that's value helps And higher but CPMs. sold also evangelize only the direct one us continue drive key campaigns. prop that of the to the factors prioritize

Operator

Our Cahall Wells next question of comes from Fargo. Steven

Steven Cahall

Yes.

and advertising some to little Just a dig of further in understand into building blocks. those

hours So Adam, getting the you and within hours. the you're with it VIZIO about talked increase like share household in VIZIO SmartCast that sounds within hours, then the

talked Could about trends growing per us the component? of feel is a maybe that's you much volume on if basis, kind you of just base? account sense hours account ad in first get like monetizable the of terms within the you So a how of

the down like you're And second seeing were CPMs is and around doesn't much CPM that Roku It really then pressure. XX% in we're seeing QX. sound maybe QX

You CPM might be seeing even growth.

So the so of could side CPM I talk was you volume question? as kind a price wondering if and of about ad equation well, the

Adam Townsend

seeing Steven. really No environment. the general, made spent streaming we're engagement streaming with telling pleased already time of It that comment trends are a SmartCast XX% across The people we're platform our the platform. in that's in Look, right? spending ways, Sure, versus of up about XX% shows more up time variety the in us problem. in Yes.

of that #X. sort building So block

ultimately shows up monetization of, the Then way in was and in it ARPU, obviously, up XX% by advertising the which growth quarter.

they're time over really our would across content, look When per engaging what's spending user, in financials. installed million that's what overall by monthly back But are we metrics up say look time showing years, context, time, doubled We're we've now the our more our than the users. X engagement in and of our our think all with our when same I that. right about that active XX%. ARPU direction, of period, you where grown against XX.X in you in they're spent base account So terms in moving growth at larger if we've

base. self-fulfilling. ARPU our it installed growing advertisers, metrics. becomes more attracts engaged our more growth as monetize outpacing That base. we're That growth from showing it becomes valuable the becomes basically ability of as other we're pure is our why So our that's these and And scaled just and more to

on data offering. pleased a seeing. going we're metrics like use -- the to how personalization drive us I inform we bring We're of do the we're enhance and So how what with for to to screen, use earlier, on home do discovery, to content use said continue search to That's about the it to why we platform, the engagement. how the lot we

ultimately, the of end you're probability at Because the playing day, a game.

increase to trying we someone the probability where content have user can in that that. around they good monetize and a spends time experience You're

CPM? So of we're here, sort really on talk want trajectory fundamentally, you blocks, about a the great do we're pleased and to those are with trends. -- that and Mike, engagement building the

Michael O’Donnell

Yes. speak the able to in with I to CPMs consistent Yes, CPMs. can been quality hold marketplace. we've pretty

lot linear think is TV Our but our clients of mass data soak our the incrementality, number I also a up or first-party perspective, data, to a around TV helping leverage data impressions. only know of [indiscernible] of best-in-class, in right? We right? small our targeting majority a from ability that's not driven first-party a advertisers understand households

CPMs can perspective, us to help marketplace. in advertisers and shift back-end measurement both those enabled pretty tell the connected maintain, TV, them as from or a So that's planning, helped targeting on I strong help the story, think, us ultimately and into that we

Operator

Our comes Morris Michael next of Guggenheim. from question

Michael Morris

growth to partners committed prepared what anticipate maybe Great. of seen talk ambitions you growth? that know can year, products you the to your kind you and we about want should for X,XXX think I'm just could type dollars that talked specific, couple don't in about your of be what what with or close that of if how how drive over engagement got, about years, William, last of curious you double. I you your and kind NewFronts this -- you the presentation there. the referenced you've connecting remarks

how to moving balance pretty And hear flow close which profitability quarter, thought thinking your with are ambitions? about cash ongoing I'd about toward to investment moving you're then, Adam, positive great. you that is love guys GAAP and generation this

William Wang

and I Yes, was It the Michael. my ago. NewFronts last I the years. NewFronts X Yes, was a missed actually exciting. attended week first very It

to like did The in we we do growth in mentioned have again million. And like of we significant over we year. $XXX a million. first year a the like live extremely to optimistic hundred to earlier, close Michael, this XXXX, -- go And and NewFronts to this XXX XXXX, was did couple over we I And year. expect exciting stream. you going anything really me, on to that? for during do people our person to how in XXX It add we're I'm and want people have

Michael O’Donnell

positive I it a was very us. think No, NewFronts for

As have group market us, product you It's big to right? know, guys the we were advertisers highlight or things. offerings opportunity to market. this to it's -- year, our for couple in a large and that a speak able this of a is a of think we key bringing And to event showcase, I be will

a our us again, -- and some enhancements innovative ad data, be home to in think big to which drive about new improve partners out to first-party incremental is We the some continues had our I growth. formats screen, for we driver to ad formats search bringing we're terms reach. talked some for discovery, our One, ability of

our we new only and opportunities out well expand rolled our for bring a great us consumers, which branded was for not create studio, then but to also new received opportunity for to And advertisers. content content original

significant I But little third a -- million went space. million we've firmly we're ourselves expecting think player we've the as And So We've in million key over started to TV those $XXX conversations. mentioned, already from as think $XXX connected a NewFronts I I past XXXX. growth. lot think we've a the one of established was over in the we years. XXXX, William best X in our $XXX have or growth had yet. And established And

Adam Townsend

disciplined we've question I business. proven always of now lot a we're the think looking of very to the that invest. over quarters And But then and a efficiencies in your within terms number Mike. time, also look, to me, we at same certainly, for identify Yes, of opportunities

a So really about question capital Right opportunities around excited are the the software additional platform dollar. down where put opportunity our need to a our it to best and upside is little around coming now, that advertising and on of we're for place comes bit allocation maybe engineering, on investment business. that That's to the us. probably ahead development, going to executing sales that overall next keep

a So we act balancing in, it's where lean between do just where do back. we hold

opportunity lot the large, is ahead think for I very a of us. headroom

to X we would think wise, and I the the only last not want it to continue that. concept, So and execute years great in in growth proof our really that, business. be putting can against We're but we that proving, to trajectory. against be view, on Since of dollars invest support the a

it's close. So

I too Yes, GAAP discipline much it's that. we'll by the look shortchange on sort focusing the do overall opportunity when an But in there. for profitability, you a it at thoughtful ahead of want way. We to us in think right don't pretty

that. that's think our to that's our sort stick I culture we'll and of DNA,

Operator

next from Our Cory Carpenter of JPMorgan. comes question

Cory Carpenter

and potentially sounds even bit on about just certainly M&E? as what informing could challenging. seeing on is then you WatchFree+? that I or originals ask exclusive stabilizing business that be you programming scale, to expand ad And to secondly, the see turning for continues could just to your the for it's how closer role market wanted and I and M&E it any signs hoping was you're still a like

Michael O’Donnell

right. All

the start with category. I'll M&E So

us So us. of continues be successful M&E a in because verticals were lot year-over-year. in key have able made to to roughly QX, challenged. was that to quarter We very for other we a for flat It up

year-over-year, I and goes food saw XXX% beverage telco list we up QSR think up pharma XX% the XXX%, on. XX%, and up over

new up growth year, for and it our also XXX in media will the not be but category, do market. only as good We at So out think the has our entertainment, over largest done in by up making M&E us advertisers it this there verticals few which a expanding to job but advertiser key past grow We not this challenged. pace quarter, expect the we've is years. slightly other remains base,

Adam Townsend

Adam. it's Cory,

lot Just on we and the a our what fits it in content side, model. think is about something -- exclusive overall how programming

content to the so, a to a our structure saw, discipline fits think, that. is last model cost or and financial we and that, clear As that you around think we manage launch. branded be studio where I I week we announced want But it really

other you in can with of platform model on content using by we more that familiar of So a words, some out meaning, be type launch there. exclusive might our this cost-plus

not develop multimillion this and content. buying or producing So episode or going is either per to out big trying dollar type

built This more is on and be recent content it's the probably it. again, and have. form can this launches. we color margin consumed, give that discipline around, fits some to to has what's We around use to built-in then data us with what financial likely Mike used and an effective

Michael O’Donnell

Yes.

out content us a this we originals Three Pointers. branded NewFronts. We the content think of or the studio. our was studio I showcased part within is one at rolling our of branded It first series called launched

not out, are content but the viewership bring only well. also Adam which going to leveraging great have in a sponsorship consumers, we -- we We at look we the those bringing to we model patterns as or know pointed a about, data as

are a XX% our from consumer we data enthusiasts. we XX% of viewers I identified are think So foodies, using sports perspective, have,

well to advertiser Man But with Pointers So on was games drinks, party, episodes, full the was X Three the Madness received. for vs March to your a we you Casey Webb helped food, integrate that into experience. were show able with side, viewing play, Food created MGM that

and but them towards integrating Three promotion Pointers, the show. promotion, through only the into not screen So sponsorships home we're so them pushing weave integrate throughout that also them

experience seamless advertiser, consumer. think pretty for So we the content great the for and

Operator

Kreyer question Jason from next Craig-Hallum. Our comes of

Jason Kreyer

Great.

added just new on I there First, partnerships some you've Connect. know Household recently.

the Just that of for updates trajectory business. on any looking

Second question, teased to updates NewFronts, at some out coming you the that are home screen. the

curious can trends? influence on you how that that could if and Just elaborate monetization

Michael O’Donnell

right. All

that. So I'll take

we'll sorry, on that. the Household home on Connect, So with start --

way to TV home, great outside the way us us into TAM data to incremental a for we within Connect and tablet and It's to budgets. for unique the reach Delivers a tap into As right? or is of new advertisers mobile, said for either desktop, advertising viewing our partners, extend that leverage allows before, increase the Household home right?

see for a base, investments. as this is it the growth. we make us be And off growth mentioned, still adding We to video albeit it incremental moving that past smaller continue is driver quarter, side, continues you to but a saw you on

So we expanded the a device perspective. partners we have graph from

and been Verizon TransUnion. working have with We

into Experian the mix. added we've Now

we'll base. investments to TAM expand we and So so continue overall make increase Household continue that and grow to advertising for Connect, can

terms the good we operating the out In some pretty we system, enhancements, NewFronts. think, during of rolled

is terms For us, it's right critical the turn in when on sees obviously home first the television. screen thing the they of a consumer piece that a

think on just past I we a screen. increase saw our This spent X months, time home XX% in

consumers our identify that spending on want and think UI to and And to engaging the make time us So incumbent them. to content to more more leverage it's are trying search in we and easier discovery, more for they watch.

advertising lot So spend also opportunities. we're time, more of as consumers rolling a new out

advertising this the first Army some for enhancements them hero more around So knife. those later making on making units, see showcase a the and year, we our is we're partners, them going you into on specifically one of be Discover to We're things Swiss directly units television. preview

video interactive. displayed, not components. will So have they'll more but they be They'll be only

great showcase well. and for for partners they to our us also to partners, churn a reduce way content subscribers, have drive help CPMs good as opportunity to increase So new the entertainment media

Operator

comes next Nick Stephens. Our question Zangler from of

Nick Zangler

here. quarter Great

to you quality, driven is The Is I'm about they for research it wondering a high-level few intent are time is picture, I questions your CTV a differentiator? around. the TVs? we market the pixels? a Just by telling what actually continues consumer price? Are TV where system purchase point mean operating obviously this evolve. the the at

get can quite will and but your maybe we itself the I consumer the the drivers? TV? where CTV in differentiator purchase overall curious Because a yet, Just the there, point are your deciding reach just view, a be primary but to factor know And there. will if we're real we OS don't what thoughts main there for

William Wang

to truly Well, is both vice software why innovation. will excellent Nick, other I are competitors want OS. hardware hardware approach picture the as integrated for answer and controlling easy-to-use you our our well took great quality make will Yes. business we software William. in-house, That's software by continue is copying see in a and as well an hardware mentioned. things and great and works we and proved believe to versa. model. model both this invest Users We the

for love different last been in our reflected ratings value various our producing VIZIO and for consumers and quality years, various We've products high-star is TVs across channels. in the XX

take I audience. like So acquire extremely we're to a strategic order focus disciplined, to continue and mentioned, satisfaction, bigger years, extremely balanced over points in will the and to further an we customer on we'll price approach

Nick Zangler

level And to helpful. to continue you Super a that peers. helping obviously, one maybe here. When relative generate able expenses EBITDA profitability platform is And then below peers, OpEx see. drive you take to operating revenues compare that at just the that adjusted as another look we well VIZIO's and it's you're to

this in system level actually same there to fund investments efficiency key will investment, another where is what that peers any components sort needs or leg uptick Maybe significant up across R&D expansion? require the R&D that to continually relative you? further missing just of or or at step to ARPU? can again, of come next will have in you sustain some if said way, Or and ARPU your time, operating VIZIO head meaningfully time count a wondering I'm expand

Adam Townsend

before, the Thanks, Yes. in very to generate opportunity and to as to operating create disciplined our unlock said future model. Look, leverage want on that again, in Obviously, But Nick. on think the really and things. being ourselves these monetization. I to an we it's same focused resources drive pride I continue invest at we we Yes. important time,

early the to The delivery of we're there. going and want very, big. is and of we very opportunity to be is make future still This sure TV,

as much more a function evolution step increase. a so massive and for it's need a think don't an higher, gradual of but I So

our about of most So OpEx the items pretty check. when well you total line really, think in are

because need to I place where do invest. cost think is to people that's a SG&A, we continue our

great to talent. have We attract

this ahead opportunity attract for to We us. fulfill vision, to engineers great that's this have

But the I back I was you they out big increases couple in done So of a will That lift again, think really launching go. terms think there company the on of proof as area. ago. of building and the heavy see years some the concept in this of

I in investment it is and think capabilities. Now a resources little more prudent bit and gradual, engineering appropriate

Operator

comes from question Tom next Our Piper of Sandler. Champion

Tom Champion

features half you're curious based experience, or in on And not curious there's for experience just the stronger intermediate decisions consumption behind whether outside seen bit back trends think pricing optimism I the what on or see understand device might half here I'm based in second little just But and guess the prior still in just your product. partially demand not of a in you term? your you've year, the what room investing drive we of William, I might the markets? whether

discoverability? XX looking And then well the and just and see the quick one, at free one a maybe that Any most there, content this newer and improved technologies, but consumption of personalization I described ad-supported Mike hear. maybe and maybe watched curious bullets to hype what personalization would just improved and kind or we're into and be the I'm for ML Slide comments #X driving into to of app cycle features, there and O'Donnell. interesting figuring extent SmartCast,

William Wang

and software we experience. better to both just like Yes, a want earlier. quality, mentioned we Tom. to picture in And I investing we're user want like the have and always, Yes, drive better hardware

And we'll to bit So we're that coming of heavily. to and experience, continue have faster up. a investing OS, mentioned, Michael years, and better few earlier, a streaming home a new money have little that screen for our invest we've and on working we're we're the going lot a in past been like into And... going to

Michael O’Donnell

one. Let next me take the

for -- are our the So users added -- a terms HDMI to we enables have, right? I data The regardless new viewing of us understand watching think in features couple we've what input. So data within leveraging personalization, the of deck. us for improved thank WatchFree+ of reading you best-in-class ACR first-party

a plugged in, journey on or So user we a once in console right? secret environment, consumer they understand playing understand watching a a they're if WatchFree+. a So the streaming enters dongle into someone we what cable they're or gaming what environment, have in

create those personalized some to some nature. help other terms that as we that may things So of experience recommendations favor more enhancements they of of We've can as brought functionalities curating in and want user in to watch. well

of kind AI? for of that leads to terms where In

because to are set data good comes us already them. ACR evolve, to to to entire gives experience in have be in we need when TV people the what watching, our pretty think this As space I up we've data models leg traded. a right? got continues best actually AI area, the the it train And

So in we will now only experience all our we've recommendation learning leveraging been machine And the believe think AI engines. help us there. consumer I enhance

Operator

Our comes from Bank of America. next from question Wamsi Mohan

Ruplu Bhattacharya

for It's Ruplu I filling Wamsi. had X. in

think revenues Do this percent you First, see grew year-on-year much your platform you nonadvertising year of And revenues versus when distribution? you XXXX, content data Adam, How what last comes data was the year? do look XX% from year-on-year. that growth? licensing licensing versus from at

on device have And is question the margins. I second

margins how that should about we you should in you now Roku to And gross be TVs, more thoughts your Do the aggressive on the their about need device than launched think you going margins? your we Just past? have how think think on landscape? has pricing forward? So device competitive

Adam Townsend

Yes. Sure. Yes, no problem.

in the item. majority data revenue, the that growth is of So XX% line nonadvertising

dictate we are growth. year last does that lapping on the as I a it deal of now Nielsen ago. mentioned quarter, from And lot So a

was in year partial period. the done period QX has a because last that mid-quarter around lap deal

suggests of That's absolute some the that to line in some moderation -- further of comps side get VIZIO the people it is item. be partnerships quite build question base. the various half well, smaller of rapidly. under the growth to second But the in function of partners. with just and growing the distribution content as using a were off than So more out easier rate of to first quarter your half the quarter. SVOD a doing That It's bunch we're us to subscribe, going more account, continuing

are you part X/X platform, partners on that can of our on increased of platform. subscribe where monetize. that the the It's now about the we and We've can total

And progress. that's continued with good people so worked and promotions some great like that's well them good We've done us. a for Starz, out --

a just very we're It's the smaller so pleased And progress base. with we're off there. making

So much the a part of component data does represent larger it.

it's bit from but still a So very and growth source pretty and good a the us, predictable. here, steady XX% moderate could for

sources. So come the sort have that volatility revenue that from doesn't other of might

to about back said We're be And ways, competitive it then it different to others it which we've where be look, to going the a make think the look side, strategic going few question our device at does on we're make be lean to I when and does pricing. more competitive. sense sense where exceedingly of kind is to want

what that continuing discipline model, it around having to strategy. so it's the for our plan having about financial do And in works a ultimately,

X models those on pinpointed what saw consumers responded where did where and last particular year well. in we we You price models, on we incredibly hard leaned

and well made that models great us in really for work that so sense. model, are Those our

continue a assess and call, cost. to if to look that's the and where Again, if comment customer they a on acquisition going are. money at earlier And lose competitors on unit, think so you even -- back some about we'll marketplace a you the particular

That's to a and us. with once home. to now is, But a lot We're TV gives cap flexibility where it goes ARPU the economics more it generating into that. great do a freedom

be. allows And to what so level needs the and about profitability right to strategically is what that right us pricing think the

Operator

today Our from final of comes Barrington for Jim question Goss Research.

Jim Goss

of the you're a to a to alleviate point a content to would thinking too as Platforms need margin a was selling that were you TVs might was it of if point. Plus get margin Adam, TVs All the differentiating our a as wondering that maybe that about side. -- hub right. it we're the on back to such device go as device the you getting X I was argument attractive if the where the that to some saying, I'm so -- just switch some on

terms Amazon, with et with to was are or about I talked Best Costco, there special second then And Sam's a Buy, deals consistency partnering you deals, each? cetera. wondering, is thought, unique Club, the a of those

Adam Townsend

sure. Yes,

as nice aspiration. the think we're a be would On that I yet. long-term look, what describing you're I first Jim, mean, part, don't -- there

enhancing value, what products, great as great bring build consumers where experience and their their do an right, want to select the keep we us think I is keep to building affinity user start device. operating need entertainment that source, do specifically system, as to to they

you've very time, created there's over loyalty well Apple think They users. And with some And years, back long-term you affinity. aspiration, margins that device. that. that passionate absolutely, do command has see that as And over we'd a right? I then comes love that the in They as that seen like so created done players, obviously, to product could

because we of to now, a model, it that allows us kind dual way have while in still For very build great this executing financially. revenue towards strong

it, new the talked are TV. We'll of the that's That's We'll And we development I earlier. new new and the the in bring about to engineering bring where today. features experiences driver part We'll so behind software to investment see. capabilities.

look you what want describing. could Do the... all the you're are to building future blocks like those towards about talk So that

Michael O’Donnell

a of be deeply. retail We value very relationships those lot consistent. our fairly can Look,

have names relationships many We you track and record strong long with of mentioned. the just

go club the different and of membership them that. perks expectations some stores with Some that value -- of and things have of

to We really product that So that But we overall as sell our terms can overall to that generate margin have to of that they them value benefit all and approach. make partners. we to we in for well those great want contemplate a continue relationship. a and

partners. manage So those with effectively very that we through

Michael Marks

and great evening. thanks, This Thanks, a joining. Have concludes Jim, for today's call. everyone,

Operator

today's for you call. Thank joining

now may lines. your disconnect You

Vizio Holding (VZIO) 9 May 232023 Q1 Earnings call transcript