Earnings call transcript Q2 2023

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Michael Marks

Good afternoon, and welcome to VIZIO’s Q2 ‘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.

third 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

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

William. over call I to will the turn Now

William Wang

and Michael, Thank Thank you, today. for hello, everyone. us you joining

the and business software again Our hardware QX model. results power of validate integrated our once

resonate advertisers with Our consumers, products content alike. to and and services continue partners

bars TV reviewers And units of great X has market. best value continue in sound performance. for and their to U.S. the on draw VIZIO in on acclaim our quarter, the During the

with ad $XXX. revenue growth even brands QX. VIZIO In is our content XX% had of continue part for we of during under share the fastest-growing results is X services, cylinders This ad and and delivered recently the within agencies, the on many back fact, demand said XX% a firing in increase the marketplace. best presence team the our and advertising all advertising CTV challenges are creating gain sound to in marketplace, in business on quarter. bars growing X Unlike our Through facing of the RTINGS.com out the are

continue to We user delivering deeper with monetization. users innovations engagement. spending scale drive greater generating quality invest more increasing Two more in our on features new improved time we that are and platform, and

time. surpassing of SmartCast grew the for Our first platform $XX second key monetization, ARPU quarter, measure during XX% the

under ago, Just metric was X years $XX. this

long So performance. short of not team’s we way prouder exceptional time could frame. have a come our very in be a I

is right With investment a framework, from the that strong and strategy, the powerful company proven reshaping and CTV VIZIO team player a industry. has into TV hardware disciplined our execution transformed

in continue to to platform further growth. our plan SmartCast We support ARPU investing

While equipping and client and audiences’ reach understand tools strategy ad is This validated expanding content and advertising for list. taste to broadening and preferences, partners efficiency. targetability with our advertising being measure by compelling extend

in diversifying user strides successful Progressive, and While our Airlines, client like advertising to And brands key tremendous United remain growth categories. our a Apple just General have IKEA, Heinz, revenue. few. name big and is behind Safeway in our Motors, partners across cornerstone, entertainment we portfolio Mills, a media driver the Strong TV+, made major General engagement advertising

alike. thousands genres. of over content recognized we a to most building on-demand time commerce of WatchFree+. total streaming streaming and our be wide XXX applications, own time by base WatchFree+, continues to spend ad-supported with over of spanning range operating of of streaming their Today, XX building user have of systems, content. including on the spending XX% continues asset our Within our XXX we nearly free offer power companies and TV The users platform titles, channels Our million

Let me give a of examples. couple you

and connections, rightly content WatchFree+ to and to we a one a the content partnership, experience the is WatchFree+. and users utilize our with allows Preview engagement TVOD access back just for to with content Peacock to services. we example we WatchFree+. click. Through engagement, offered feature Peacock premium and which with episodes to to This Along our the us, platform free move an can Regarding to audience to how within of new called launch introduced NBCUniversal NBCUniversal full drive content audience partnered of promote content our between SVOD partners target users

free Barbie past movie commerce, interactive WatchFree+. their QVC events streaming sales ad operating through awareness XX-second commerce enabled leverage ticket and June, HSN and within recently, on terms marketers launched hosting drive services More unique interactive assistance our In commercials shopping this VIZIO. and key of the for to

focus the rolled screen. June, home design of With continued a on re-management this experience, past consumer we out

we the With feedback the positive never getting from new we and discovering, to personalization reviewers. thrilled easier. VIZIO been And have has been and users screen, navigating, streaming home see are content

is our tested new second to of series content home brand-sponsored sponsored BetMGM. studio, supports model premier was by the is studio a into delves our tricks data-driven available. organization series approach Break X to world tips also This The branded screen the service and content. a pointers and form Johnson. and SC that business And strong exclusive sponsored Clean of I’m by new content announce branded unit, pleased now the successful that latest We our first

our segment. device to Turning

expand living to see more their presence larger our consumers VIZIO We and monetizable are thrilled in through screens. room their

to the the home engagement. know selling market larger For main quarter. models the screen example, that highest sizes of in TV our be XX-inch show and Through units we the tend the data, and the our XX-inch during top were in X

at business [indiscernible] whole incredible our the Additionally, compete to the best is value. way entertainment an experience

to spots some the need play on the to As aggressive selling the support do to to where race we bottom not on a when market, and best picked units always, our see the we pricing of be in and game.

strategies investments to understand has pricing our deliver With which consideration aggressive our only a price be for we of competitors. that exceptional and The management one value disciplined to demand-constrained by continue consumers. respect is customers. industry very is to We that, with cost will many to navigating led well to environment,

often say, just isn’t I value As price.

continue reliable market, quality products feature-rich, to to great pricing We on with and service. a the focus customer affordable along bringing winning and world

to So plan that very a our our the at by customers’ investing clear for in I to industry. user lives we hope it’s experience improving are driven in mission VIZIO, the best and passion deliver continue

investing is of many now helping in a to achieving years and team exciting challenging for are who want opportunities. it to And creating our way, come but SmartCast are thank what’s performance a long see have in I just platform deliver possible. strong record so advertising the the is many surface marketplace ARPU quarter-after-quarter. of scratching We we to our how

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

Adam Townsend

William. Thanks,

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

again Our a strength quarter on model, expanding integrated to results despite second our rapidly us through platform macro compete which the of businesses device once growing our challenging allows demonstrated environment. while profit margins sales,

in lower and device promotions from total million. revenue company the improved new Again, revenue high-margin device $XX This to and operating XX% to expectations total our represented unit grew XX% X%. lower at Platform+ at which grew price together, and Total price, high Taken of company $XX growth margin through came Total on new of offset down ahead combination came lower Platform+ a thanks to volumes gross a was higher profit gross more a well in XX% total gross on unit high-margin on revenue, strong benefiting basis $XXX strong dollars. Platform+ consolidated partially average of an points XXX% acceleration advertising. fewer by XXX revenue by profit record profit advertising of EBITDA million, million, XX.X%. of revenue, adjusted XX% revenue, in judicious our of expenses. company

some additional context, provide will Platform+. To I start with segment-level

in revenue. Our revenue a of strong by was XX% Platform+ increase advertising XX% growth driven

the said, fired our first all growth William on the rate from accelerating during quarter. an businesses already cylinders advertising of strong during As XX% quarter,

pleased where most dollars continue take fact segment growing of We advertising fastest share despite less-than-ideal CTV, due within advertising expanded the the of to we our growth that this we market. the are environment. the presence to It’s marketplace, the are by achieving a in

expanded the returning we as advertising advertisers. client they year-ago their quarter, period. advertisers, our the direct by During relationships with And new net us XX%, spend XX versus increased the adding XX% by

key own screen user our WatchFree+ our engagements in revenue, significantly While during the the across quarter. category like inventory. ad-supported advertising our were strategically such our media us, strong remains as focused content and for diversifying we and opportunity. to category home our our for our pharmaceuticals inventory, up key and remain QSR, advertising a demand within auto, growth specifically driving on lever be continues particularly expanding CPG clients all app for Verticals entertainment a With video advertising

During the an addition our channels channel quarter, more along content premium we offering with Peacock. with expanded local exclusive from of WatchFree+, in broadcast Preview the

including We Nation and Channel, Earth. Weather to platform, our the Power apps also added Wild

home screen, new features, in Now reimagined the the to increase click-through reimagined seen row, user and our our example Hero which interface in in continue already discovery over have June, screen rates to on off. ad-units. content home drive investment screen functionality are is home out Trending and Since already An We invest in our this of rolling and enhancements of premium is XX% we paying an Banner which engagement.

Hours quarter all-time As the differently, growth means are user attached TVs. consoles VIZIO enhance $X shift using cable during our to it in high the SmartCast spent time game percent are viewers of deeper total to compared more Hours an our players translates streaming increase by XX% their way viewers spent the spending Said of continues is users as combined. and during VIZIO billion total Hours as experience, users SmartCast X% XX% Hours streaming the grew we TV, outpaced into reached media or than to on on Hours. a quarter. the the more VIZIO versus our SmartCast content measured Time broadcast, by total bring This to Time hours. of a and streaming our new increased primary engagement.

showed ARPU revenue QX, TV to by Our within first new Platform+ a SmartCast surpassing in healthy growth grew revenue time. distribution was of the to due also and partially $XX offset a to for revenue non-advertising our fewer content up XX% million. In shipments. XX% record $XX growth, button $XX.XX, decline Data

of our product grow. measures, user by base, seen the of and With to improving ARPU offering our monetization believe continue and as SmartCast our engagement the will quality our strength team, we

Account a new Our X.X grew million. SmartCast base year-over-year XX.X record Active million to

are shipments quarter with committed the highly to The our in strategies engaged approach growing unit $X we market focused $XXX revenue of pricing to down base highly users. segment. million was declined and our Device disciplined an million. Turning XX% our X%. our TV Total competitive, just average on to over remains to and price installed

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

to For contemplates QX, strikes from representing ongoing in for at partners content expect $XXX in XX% $XXX other and revenue we trends come to million our the Platform+ continued ad between expected ad due spend million, delays midpoint. categories. from outlook This range growth labor strong and the

representing We million, margin finally, expect $XX in expect the company adjusted gross Platform+ midpoint. we And the $XX XX% $XX million. profit of total of range million of at to million EBITDA to $XX a

industry. In closing, and number the thoughtful have now trends to of technology, powerful positioned and we investments VIZIO out a capitalize software playing on in across through our significant people,

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

Operator

you. Instructions] [Operator Thank

Adam Townsend

Operator, we question. the will take first

Operator

question ahead. of line Your Laura, with first go Needham. please from Martin Laura comes the

is line now Your open.

Laura Martin

Hi, for down drill into homepage success. KPIs I to wanted Yes. the

home in seeing the CPM other you Are increases prove their Is that rate failure up. June? – home said that click-through do nice higher have You redo success really the screen think? of new And you do-over, because or got of here. you the metrics went screen

William Wang

Laura. Hi,

Let your question. me answer

we year. new working on experience been over have screen So a home a for

First amazing to I of putting for our want team all, thank this together.

engineering will I team partnership see our to development. partner, design So to

and I person. out; a more part big easier in it. navigate. easier to It I thank home where search, to want VIZIO that lot personalize wish The and discovered to is is So content and you easier to to showed it’s all. I everyone had you new immersive to a new a screen lot at

bit advertisers Now engagement more our Mike, see consumer to add encouraging, was of little mentioned. XX%, the care increase super We and you do preliminary response like over it. you that. an love from for a

Michael O’Donnell

Yes.

I think you in that CPM covered experience, the I should contemplated. into ties directly think, of terms growth be kind of future

start of end towards I rolled into of Laura, of timing; just think the terms coming the in QX. we the this the quarter, out

So that it’s shouldn’t be units, ad intuitive, That pointed more larger numbers. immersive, personalized video. better more with said, more out, as the QX contemplated opportunities, into it’s experience, this William

that already in there. We have increased seeing demand for well increase as units are CPMs we the as

was the business. just a we a definitely it better experience, So believe XX% consumer remarks, very a advertise have for from number well-received will good impact perspective, indicator on consumer think increase experience but better in a And both good think drive I platform. the the in partners on the engagement, to of shared that our opening Adam performance I good a do is his also ability

Laura Martin

to you my channels second now. an guys run of you do platform. have then hardware And Like XXX has with fast Awesome. the final – and question software integrated can you

there’s what can’t whether overwhelming just because want discovery about So choice can of channels? watch choice you free these find there’s consumers some much too just to and at where point they talk

Michael O’Donnell

think do we that’s on one, the to the and great. kind of there’s a parts of Laura. how consumers lot I So platform, two get there’s There’s that, choice and

have opportunities. within platform. different We of SmartCast lot VIZIO a on content itself the

how and looking they’re content then we for do EPG within we consumers the have get WatchFree+ WatchFree+. into them find So within to we right how do the get

discovery. part, search So in and XX% home think of ties search to this We spent on I this first is for a the screen, increase in the time question. critical home terms just year, year right? on know spent in into saw, your first the last time from and discovery, We screen

them click ad within engaging WatchFree+ we the like to for that as So So WatchFree+ invested we in you sports and that. we’ve can that we help we sports, right? there. experience from to an our consider in call have create we the directly data what into as WatchFree+ what the Once and interface enhance user can – use WatchFree+, editorial the units ability channels if find a identify opportunity within drive what environment. you’re gives user we perspective, well continuing to leverage interested to help watch within can that within viewers the lot and recommend

lot that but can we’ve most them, it importantly, watch through have our look categories they’ve got to of for or to other more seamless them pretty for of make additional the and search and to EPG. recommended help for that easy mini a Once the we they different other We categories channels, find they throughout. consumers guides different there like types navigate for content

Adam Townsend

And this leaving Laura, just here. is Adam. a concept then, I

the So share cable rev being as we different. model think a about WatchFree+ is a is model. replacement, you think structure about This

bring So content make we as if in, engagement, money able make to we’re the people source drive and money. partners we and it watch and it

economically much then you in into out it. than people beneficial going it’s and the a monetize so to to structure. cable we it, that dynamic reverse your service and more a different affiliate It’s an paying of are opportunity running And bring content service, a hope actually fees and that watch have

Laura Martin

Thank you.

William Wang

Thank you, Laura.

Michael Marks

next take Operator, the we will question.

Operator

please comes ahead. question Morgan McVeigh with Cameron, next from Stanley. go Cameron Our

is open. Your line

Cameron McVeigh

you really for if questions. of of that ad And XX% how the in impressive year? strength visibility half thanks this categories the my taking it’s is spend at environment? in quite just all discuss the you’re could into Hi, if weakness growth back is with Thanks. strength seeing moment, the spend ad and your in or Curious

Adam Townsend

one. that take I’ll think I Yes,

came as on of from those when that expect in we the XX% We advertising think or the heading QX. our to delays enthusiastic remain look a saw entertainment as half we very some advertising QX, majority start of growth in we in the in of do momentum with But growth as we and of challenges at writer saw fall the impact premiers. opportunity media will carried right? when media side will first but XX% XX% and that remains QX that you about So outside the end second end the quarter strike For at through it QX, of pretty saw half. this on. the those that we and categories to slow, year, confident QX we’re into unclear entertainment. quarter, somewhat QX, ramp growth delays end, And went growth the

we So diversifying clients the we’ve advertising strategically focused and have. expanding on

And less so single on to vertical. we continue become a reliant

triple-digit the this pharma, verticals So XX%. quarter in see automotive, we quarter did for past they QSR, CPG like growth was up all had us.

I think we advertisers talked were all this outside M&E. of from of about again adding XX categories quarter, new nearly those

think M&E, of right on And about done the confident has all executing So of about I just outside verticals great fairly a back year cautious which this. of the team half now. this we’re we’re across job

Cameron McVeigh

Great. Thanks, guys.

Michael Marks

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

Operator

Kreyer Our ahead. next with please Jason question go from Craig-Hallum. Jason, comes

is line open. Your

Jason Kreyer

Thank you. Great.

one William, market First macro pricing. seeing if get if longer-term in just a thoughts profitability there’s hardware where to that for and more now evolution the to the more cycle pressure right or your challenged? wanted for pricing point keeping think starts the that’s tighter just I in competition you on Curious abate we’re

William Wang

mentioned many irrational price. Yes. challenges times, factors. we different by Great just many like many during question. faced value on moves consumer I quarter, pricing a great isn’t Well, for the was the that And motivated

of inventory share sound coming because know, was think some dramatically excess TV fiscal out and as incremental dropped because the for on global there the CTV And inventory. a for you demand market newcomers looking lot I of a citing it and home.

partners. the value believe investment, disciplined consumers. such we and VIZIO, investment most is the our where we as not are the that? ARPU. us pricing the weeks. recently software most decreasing as engagement to the see in sizes invest for on on by do focused means We it for as maintaining those can All last few shareholders the the profile creeping most on and success add long-term TV our in stay healthy long-term areas so And we our and a matter development bigger extremely want only Adam, margin TVs pricing you in critical price increasing see And up and also for the we in customer TV different our for we retail satisfaction, the gap success to

Adam Townsend

Yes.

to So of some And think towards going back I our it’s on what year. doing. to of we think depends pricing it’s our drive something about closely pretty half it the watch the strategies we’re going how are competitors because

the into we deep As our William prepared chase kind race need earlier feel of bottom to in dynamic. to said don’t remarks, the a

going to be disciplined. pretty So we’re

sit in places we even where the to sizes There are to going continued back. being have We’re without gain leader. share screen price

So I of look the we’re the to overall pricing margins think we’re device of speaks as and strength strategies bringing going think should part that It speaks we prop, to and strength to brand. of going consumers, that the as to use what the like about our a value forward.

Jason Kreyer

– you. be Adam, on expand maybe you labor by just your in being Thank that you you, Perfect. being you talked how impacted just impacted that? with sticking by about the strike, guide, can would

Adam Townsend

with to labor Yes. gets a home think, where shows. money, our out. they launches, premier just as being we the media If to goes specifically fall shows spend go And the due on category tend It stoppage and then particularly key screen. to their new the entertainment we have pushed to back that into promote nicely a new really advertiser, us don’t I place that’s

of if. more So an timing it’s dynamic a than to me,

people highest intent promote is that. to incredibly have to And place living our room, the screen an view. home Our partners the right know It’s where content. powerful in

launched. high-margin back is to And available That as the shows those comes as us money those so soon are also – be dollars. are and we ready think to

be great entertainment the as making client screen. partner, in expanding the to So progress Media on home core think ad diversifying about yes, a we’re continues particularly and I base. and our guide,

will thoughtful If out dollars that to the get wanted we the to and later, see so we’ll the to great, in about they timing those when actually forward in. they come If when they’ll shipped sooner, we’ll of timing and have come model. And come look of be in into that. come then

Jason Kreyer

Thank guys. you,

Michael Marks

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

Operator

Morris Guggenheim. ahead. Michael next please with comes question go Michael, from The

Your line is open.

Michael Morris

I afternoon. earlier. Hi, thank topic the wanted you, CPM Good ask pricing up about of that and came to guys.

see You’re active obviously supply as ARPU. growing in constrained faster well, I you’re in that kind of your you – know power your the revenue the and your referencing past. you’ve accounts been you’ve as but growing

my a more and coming first stronger how pricing? could in how is, that home helping much the versus guess hours even growth of inventory I the would on those incremental have So of you new number above is That viewed driving question. bridge So these difference question creating pricing be all Or the and hours incremental you screen like strength engagement are supply is be much and if within from or help that? the initiatives supply us things my can there? you

Michael O’Donnell

Yes. Thanks. I’ll take that.

there’s a build factors I couple that of think in. different

to First, platform. search alone, been generate XX% units, of led into terms screen there’s screen home we monetizable able supply lot a about of the to the consumers – not and ad spent more discovery. in home ability We to talked own time like the our places That’s our drive more have more in WatchFree+. also on impressions, within year-over-year in for but terms growth only

So those monetizable been increase with time we’ve in spend SmartCast or of increase year-over-year the able environments. engagement usage to XX% in itself,

supply helped. So has

identify CPMs, more incremental ad our as the itself us or of both into that budgets, fill as direct well shift CPM and data on marketplace viewing of so increase rates, incremental more an helped heavily connected linear do but for growth. sales, that a invested TV out identifying more as product increase is viewing channels. people, infrastructure engineering also through reach. only the there appetite in best-in-class increase tech TV piece We the execute our in be also digital-like better first-party the that improve data continuing That’s the dollars then is things on sell on We’ve helped like we’ve data And our through side our around programmatic have for headcount us in whether to front. to has data and technology last not or this invested the to for reach buy leveraging

our So growth. that’s CPM helped

advertising So I have factors revenue. think that increase there’s a helped couple of different

Michael Morris

That’s Michael. helpful, about appreciate really ask to upfront. wanted question that the One I insight. other I is

we about commitments. the sort on a prior dollar call, You it’s overall shared about front I haven’t new heard some And of really the good anything. slower been believe information this don’t year. but marketplace

I’m impact So how upfront you’re some it curious, if your the of on this would maybe dynamics take your year? market business dollars, those in giving unusual

Michael O’Donnell

Yes.

very for the fronts us. So new were successful

QX this I discussions think we launch to I talked of in value. been upfronts. slower about well we’ve pretty on over heading I not ready are very it last confident the quarter. which Great and these show the And conversations. dollar you in terms period, time well us I’m our years we’re during received themselves. little really to brands seasonality a business. get typical up they into by closed set will just upfront they for both advertising share is but a the And agencies X have They in than side, been, as time mean, But know, think

X we on having years heading $XXX conversations year, million. that did next the once year. to we our in past we $XXX did So upfront, again based into This first million, grow we’re expect ago, and

Michael Morris

Great. answers. Appreciate Thank you the very much.

Michael Marks

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

Operator

please with Fargo. go comes from Steven Wells Steven, ahead. next Cahall question The

Your line is open.

Steven Cahall

gross setup talked but only or ARPU ad seeing to out key the wondering the that or to customers can I’m which of the the And Maybe see you’re screen if on it’s versus home group? you roll the to on drivers if only and or younger net strong installed accounts your you some ARPU devices? of that for that percentage similarly, that’s a is in how be what if We the devices? adds you’ve a devices and active of peer trying an talk different available one accounts, new older just it better drive has Thanks. entire base base appears drive installed to to and adds with of strength strength can ARPU first, if able you’re the about wondering about versus have

Michael O’Donnell

Thanks user for making because Steve. really improvements touching the our important base. on about you’re a Thanks, quality the point of we’re Yes. question the and

seeing you’re ARPU. think the in I that growth in

You’re outpaced so it the TV. versus spent Hours, streaming time the seeing in hours total using SmartCast

user growing base in not that’s areas, only but highly our us, So around the most meaning engaged is to growing, it’s valuable streaming.

prepared XX% now remarks, a of new TVs in us. mentioned we using time our our record spent in environment. is streaming the As That’s for

you If this Hours the going since SmartCast look QX at quarter account, to per back active XXXX. highest of was

that to to your main powerful the sense, opportunity So streaming. in be to right? adoption it screen going monetization. into upward us. the size spend, tends for valuable It of in really really that’s for a and entertainment most of and terms makes be we’re the back That’s on That’s going move and the screen, between positive is to continue us high trajectory The larger TV a correlation drive time engagement. There home. where you’re to absolutely doing be

in to So we the well have larger drive our in those units sure do share our and be to model to competitive to and make continuing we’re able opportunities. work to want be for want that gain screens. We grow strategies monetization

together. all So coming think I it’s

it seeing the ARPU That sure driving You’re metrics. for a from our numbers in engagement here. sets standpoint higher quality from up keep to and us

Steven Cahall

competitive for for And the QX? are of Thank margin? maybe guide margins on device In little in implied how step willing then you. environment, And just kind margin into device. negative the what’s more or EBITDA lower a to follow-up bit a you

Michael O’Donnell

Yes.

So year, be to new period half for we’re going back the stronger purchasing TV. treat consumers seasonally which the of to tends a to be

So that be to competitive. an want it where we is area sense makes

around top make to great same product. our And maintain units the our quarter. even did to of five sizes the then responding We’ve share. shipments going strategies That’s market overall had still We’re around year-over-year, to sorry, why in in and move in units on really particular the we screen that consumers quarter, right able that the our top selling impact. an discipline we can we the the think have we grow right be didn’t – we pricing success in but offers gain maybe this competitive environment, seen four

to brand, price we’re even on the strength when speaks screen size it So not a basis. of the leader size the by screen

think us. to I that’s So helpful

go of back obviously is accelerate way pushing homes. half in out account we and to key growth. the products we to means the that active year, A sell-through, increase off As to more the the do into shelf which want

achieve us where to So most we give makes to exactly pricing the sense. it we And leaning deploy think the that best opportunity will strategies that that. we’re

Steven, the forgot back our able to question to I screen the to field. just compatibility backwards we’re realized the your of in tie units Yes, all first question. I do to SmartCast-enabled home on

new be So coming to really like up and great. is home with that deploy a out able the fleet that across screen

So here’s user experience. a

a we experience user had a It’s for that great and It’s deploy got a multiple years, include opportunities. TV they can Someone’s unit. experience. great us because into for as features monetization just engagement, brand-new brought well their will new

our compatibility do on a to comes that and is team backward be our to architecture. really a of great together software basis to that All able and attribution overall

Steven Cahall

you. Thank

Michael Marks

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

Operator

Stephens. with The next Nick go please question Zangler ahead. from Nick, comes

Nick Zangler

of want to but quarter. on some Hey, the quarter. in made to drill down guys. my TV, through still into announcements the meantime, buy the Congrats I looking pizza these in

advertising opportunity of just partnership media front a you represent? come? is is this can does like which network many And Intuit, what – Intuit to VIZIO media with and retail here? to one the have about partnership Just are First, retail just partnerships that seems the on recent the talk potential built incremental

Michael O’Donnell

It SMB is, the retail Look, partnerships network Intuit think newer like data connected to very our a opportunity with media VIZIO categories rapidly it’s allows some target is is Intuit’s Intuit So And market. properties. able best-in-class partner, Nick. categories MediaLabs. workplace advertisers help set this growing expand small is across an yes, portion are to we’re helps We fin-tech our data that partnership. think called telco we it business totality TV us the small ad media services. can a obviously, augment QuickBooks growing of exclusive for and small But from I prop And Yes, various of like business travel. and about customers expand think TV being a a excited the us a perspective, there’s retail launching What with reaching into we right? marketing and think we also already sets. value high valuable business-focused owners. data

So we’re the future. some in excited there about this partnership, and are opportunities in for I space us think this good

Nick Zangler

Got And Peacock new bit little quarter. Helpful. a Obviously, this it. delving experience deeper there. on just Preview then the

operating system. guess is relationships? the additional generally, like again, another are And monetization whether with think just of like question willing by incremental then means just being we demonstrates adopted services, just as way these services the another I you yet various these how attracting streaming about an think I to it is, streaming engage products other you should see viewership? of yet

Michael O’Donnell

Yes.

future. look, for model Preview So, another Peacock it think partnership it the call a And be actually great I exciting another us. for we the could was we think – exciting

on NBCU, update Peacock content customers. of an offer you with give original our free to to what for their within WatchFree+ just our partnered that episodes app was, to So, we

our us new great additional instance got exposure it us. and Peacock for home new premium available added promotion to audience, for because free was WatchFree+ off screen, the fast it engage in programmed for Bel-Air to of channel for and customers because environment. the into see content got consumers by generated to a episodes their So, Great content,

cool, to subscribe we for past and enabled episodes. for I really episodes, believe But into So, catch great head added all to around, one watch to great Peacock it is for on of up what this click with interactive consumers them, jump viewers directly or that WatchFree+. viewers more or overlay that great us, an made

their between component rate So, it that overlay to itself, and we services. on example, to app, was platform ways right. WatchFree+ me, of promote is an this new very seamless can to saw, partners jump made back content great. we add interactive in engagement subscription But and XX% our great kind as I which utilize drive believe a to Peacock our And a the that their

standpoint, partner to on continue side us with we and new with have monetization with out there opportunities obviously, features and are for the been entertainment So, that to have opportunities reduce media screen core grow that can working build great from these a is relationships – to apps also And and the to obviously, interactive monetize us that, for engagement, subscribers, capture to churn. will that some new promotion, not only but to increased help it grow them in through subscription home of lead revenue ways overlay.

Nick Zangler

color. Great guys. Thanks. Appreciate it

Michael Marks

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

Operator

ahead. Champion comes next Tom Sandler. with from Our please Piper Tom, go question

open. is line now Your

Unidentified Analyst

question. likely about success the lot I we having It customers either these TVs. This Is like just you for convert a for customers, some taking Thanks first for higher-value Jim guess are Tom. more guess potentially selling with should SmartCast William. larger-sized or how on possible that? think I to the seems are one of it is to of

William Wang

Yes. The bedroom. living the the have tendency versus being to room a larger main people screens secondary to

streaming So, everyday use people usage. for engage that and and with

our Adam, want somehow data do than So, the the sizes. you some add – engagement to to longer smaller it?

Adam Townsend

the earlier growth, I strong mean it mentioned as shows is. us it think of I does what that that what Yes. the I lifetime correlation TV value is to

very So, look the the at in the our analyze we and lineup. engaged is, TV entire home across streaming this what we spent long how closely time unit stays

more and get on sophisticated more. a know And sticking valuable. for are Once those that and streaming you XX-inch home, And consumers very wall your a are we who to with units so at are these probably your that into moving while. are unit adopting you question,

information continue these a discover out. ways monetization And see and more lot as pointed Mike so to over with content engage home the search them households are as with to bring more we the on content to interact time them, and Absolutely, of drive with have, to platform, very we them. and to that screen opportunities more to quality allows

William Wang

was QX, And Yes. TV one the XX-inch our U.S. during of the best-selling in

Adam Townsend

it’s us. for It Yes, was. valuable a very TV

Unidentified Analyst

a seasonality cadence how And should SmartCast keep the we you. think about result. Thank Great. with forward? mind Is guess XQ, in we the should or guess adds I then follow-up any there net on I just Okay. of that going

Michael O’Donnell

There seasonality. June first seasonality in the impact seasonality around We and February some some even typically. We can that quarter. Yes. some is see see

That’s pick to growth see about for improvement do up to to we the as first half volume we expect had think now, in of of I the the and as year dynamics back it. around why mentioned So, some along rate initiatives earlier, our that metric. period some definitely seasonally of active sell-through should The accounts with, half TVs. strong drive more

think pick see we will that I up. So,

a data I early. it’s only an already of through than behind QX. here have us, of July we seen definitely we got It’s know We most trends but acceleration QX. month better in saw in saw

period first the be it that’s do So, seasonally encouraging the year half growth a we so stronger in for of the back will half. far, overall but think versus

Unidentified Analyst

you. Thank Great.

Michael Marks

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

Operator

The next Wamsi, with Bank Mohan comes of from question go America. Wamsi please ahead.

is now open. Your line

Ruplu Bhattacharya

Ruplu Thank It’s the Adam, for in questions. had non-advertising. taking I the questions, for two one today. one you the and on advertising revenue filling on Wamsi

me Let start non-advertising. with the

can like than content buckets, the think grew that these distribution three which these year-on-year, three of little the about you XX% the than first which three stronger quarter, the was fare and how was first buttons, like quarters, last XX% licensing, a weaker saw you than the So, you which data less us was that understand When between quarter. help bit quarter?

Adam Townsend

Sure. Yes.

growth, but of remind deal of those. XX% I we say, components out, sort first also, that But and is QX in against Nielsen would there, that not that of year. good just you I pointed this the dig want last double-digit the comping growth full middle So, to each of quarter did you three the I into it’s still the will

deal we the only comp against XX% quarter So, year-ago a in partial comparison. from full the period. was QX quarter growth that QX now have

we rate to would lap of eventually quarters that moderate have of we bit. we So, been deal, expect growth the on indicating non-advertising for would and a that couple a

we continues allow very in data We We have business. to our data licensee of have valuable our valuable we to most have is that data are go our partners know value, and to ACR think we and as bullish renewals marketplace, to the we us that forward. that still the higher growth all on the will really price that subscribe that data, in that,

be to there adding in being really will contribution from that able there A mechanism. growth through is ramp-up and VIZIO of a data that the early distribution content consumers mode. So, pretty us to there. accounts The feature subscribe tied side growth and the our for is still business. lot steady in It’s that content then

in building are phase I think we there. are we – the and

to a that time. contribute there to so for And think I is growth certainly continue for runway over

tied a it’s source, The it So, to definitely is of nice component our volumes. overall button another but revenue shipment is revenue our growth.

you a down bit. as So, have seen come volumes little shipment

unit are to QX. It we I down be think correlation a pricing was that going dynamic. because a in to about that’s XX% direct just per

to So, periods where non-advertising going is growth there in a the for shipments, lower to that is headwind be revenue.

Ruplu Bhattacharya

Got it. there. for details the Thanks

at For strong my on so ask follow-up, let advertising growth revenues, XX% me year-on-year. you

have open of marketplace. sales direct most your traditionally, sales think come from versus I

do spend, sales gain of continue traction that becomes advertisers mix sales? overall on you still programmatic you percent as to a more that or CTV with as you versus the direct and So, direct think market higher it be of share, will As your programmatic gain becomes do of thoughts most just – more think changes, mix sales. through

Adam Townsend

Yes.

in in building some of agencies phase sales the relationships the given ad I and percent us like value brands, more leans as we TV those with building that a those the of and services in directly categories through or many brands towards are total. with think cases, managed and direct think of the generally, clients we up the we already, where relationships that broadening big mentioned

certainly in buyers versus cases, campaigns been in We pretty some ad big the agile with some have that of around this kind models looking XX-XX deeper, mix. that want that programmatic. bigger cases, data. to were terms topic. trending direct adjust marketplace first-party of as using opportunities We reach our do in That’s one But have targetability around we for our beauties are open to of of

touch them managed goals our higher leverage Household to requires that But different So, I might to dynamics approach. a want services off-platform and them to Mike, with a capabilities more their of we bring that want anything do achieve around you campaigns, lot their that of there? add can Connect, help

Michael O’Donnell

Yes.

I would think factor. also all a touched on add, Adam, I CPMs points. you the are

There standpoint, environment. a shift of this our is TV XX-XX some new advertisers that TV, relatively out big lot of education today, linear been in a right. is marketplace, streaming linear who Connected for takes time the spending long larger very a but that mix of the from still into in So, for Connected dollars or have

been found able the we is we managed generate what to sales today So, the or direct have aspect, through service through CPMs. higher

So, of to we continue and increase rates we fill direct efforts, our backfill continue to sales as CPMs more dollars. use make somewhat from a will programmatic to higher generate

see I as think CPMs see see programmatic time, continue And increase, mix time, to will – that as expected, we continue we should increase. think over should change. over we to they I

Ruplu Bhattacharya

Okay. Thanks for all Appreciate it. the details.

Michael Marks

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

Operator

Our comes please go with next Research. Vasily, Karasyov question ahead. Cannonball Vasily from

Your line is now open.

Vasily Karasyov

you. Thank one for I have Good Good Mike, luck. morning. you.

that just take happens advertiser at sense. platforms So, looking that? dollars other – say and us. do with why? So, understand can advertising it from And you you CTV rate You you from they there? ground and just come they give how to how to on to and this mentioned help connected why? you taking you of the other But you us TV from you that channels, incremental that growth helps you Do just us mechanically or AVOD if services dollars or – are can advertise give and share happens players think obviously, and an to or us makes the budgets other so, the achieve give just what you, explain

Michael O’Donnell

Yes.

less the marketplace. the from rest focus So, to I we our of would say on share think from perspective, I take trying necessarily

there. been out increasing it’s pie think a significantly I

in this year, Connected spent is TV. $XX think there billion to be I going

Next to up $XX billion. year, expectation the just that is

XX-XX sales. well, So, of what terms I think has at done in that direct we our team really look and

you has in incredible customer, team value marketplace, but reach an around terms how but based for on problems linear incremental historically our in really a set the how that first-party Inscape data, TV have been And against only sales value the that data audiences done good target set. story plan, environment. not incremental and of to and reach reach there or have identify we lost our measure direct or may not first-party only job and data getting target of Our in also VIZIO educating a smart viewing itself, do the our the Data out of solves

story get whether So, job measurement it and doing data, a the I continuing good us ramp to for that I mentioned, executing build team new our in planning, as continue up, really targeting, the be marketplace tools would around then a and around think has very marketplace. sales strong to the in helped position

Vasily Karasyov

Thank you let linear How differentiation foot that right? pricing think you about it? option, first-party a Is you something allows pricing? the or So, door, comparing – ask in data, that TV, do the because incremental reach, on above? you what get your your or yourself yourself advertiser But that the to in your is that. would So, to the below, it you pricing you the par follow-up. pricing pitching me be of TV Well, are for as linear does that an right, if definition with selling right? competition mean you so by puts do is price

Michael O’Donnell

Yes.

are kind we targeting buys us basis, I or CPMs which think typically from demographic marketplace. our is Typically, how buy in linear, first-party of more or capabilities, the around increased digital us CPMs of get audience which someone increasing perspective, that which a from typically data, is differentiation in the the helps separates is on an right. adding

ourselves to more than broadly solution. selling prop different of the advertisers positioning It’s the environment. or addressable an ourselves So, necessarily we value linear on are

If being reach. what have well to it deliver go product tools worked higher at that able understand with and CPMs you go help us. think by example, a which when in place guarantee that’s streaming look Reach I targets, we will other down. have, people those are True give cable we watching call environment incremental environment, a well in that. So, is data leveraging And we they in of And execute have the we planning up. tools CPMs to which certain if against component and reach, we generate as levels in an the of able have us incremental we Incremental don’t, I we the we But a and those we to hit been

Adam Townsend

it’s where viewers sort the Adam. the just as We is Yes. are don’t Obviously, expanding zero-sum one this here. advertisers Vasily, add CTV idea are of want and to going. I think about a a chasing game.

just scale, continue So, as to more is more there. grow there and we capacity generate

be sort to of supply constrained. continue We

bring grow So, opportunity those are of more in our a where it’s terms in they we because bigger their base user now that dollars hey, supported time we we grow in can and base campaigns. tell an we spending streaming We can as are to advertisers, your scale. hours of at content, take our and

think So, I to we where our are terms an part the think and in of kind maturation the about of is this important scale of opportunity.

Vasily Karasyov

Thank you.

Michael Marks

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

Operator

you. Thank

Our today Searle Scott, final please Scott question ROTH. go from ahead. with comes

line Your is open. now

Scott Searle

off that slowed Thanks I still are back front and questions. attach and And maintaining additions. quarters. legacy go the that devices from ARPUs maybe devices wanted to comments higher beyond older on off. sort It taking seasonality, clarity into are churning along something just Hey. your like If get go of to if it? there higher Good with is just It my churning newer for there to it. sounds quickly rate SmartCast that read net that last it’s are of devices that couple afternoon. to

Adam Townsend

never Yes, Scott. why use see There after be a cases TV XXX%. and a XX% at some someone purchased still will newly over rate. buy activate can other for is – monitor it, reasons we mean home or Yes, purpose. them different been bring I being it have to sold is TV absolutely. It’s people

And but XX% over it’s still nicely hasn’t that so been and XXX%, really it’s never changed.

base is about monthly quarterly grows, churn – just is getting use like bigger. X% be some And to a numbers, if to base as you bigger even installed a think or going it Our number generic of headwinds. more in

the funnel in churn to the selling the more more, gaining shipping be through, to base. that of at got offset have top more You

bit an a We sell-through and rates little have lower. fewer environment shipped have have where been seen we

the someone So, who account top been of an unit the not strong turned active of funnel terms the the of to terms connected includes on in growth has to during the definition in the churn month. our what it’s and Again, as number of the absolute out offset help is is is – base. Internet,

off house decided So, for the part a Internet different of and to not as some add number. if that it that it reasons in it put they the falls to will the churn use frequently,

our out working of factors a doing – improve generates But to those number net help together so engagement that activity. account and what reengagement And we is initiatives are lays growth.

We are around marketing. activities some doing

with working service as well. our are We agents customer

friction We in with our disruptions working engineering sure deploying reduces make consumers. timely are updates we way are or to team that a to

year half back So, looking as I the forward. a accounts of so attack adds ways am, improve earlier, we the lot very of first base that the show net to stronger active we I half our in are saw than optimistic different going this and far. And growth will the said in

Scott Searle

helpful. lastly, Very And Okay. just could up. if wrap I

ARPU to couple ARPU assume between do been CPMs, e-wall ARPU growing has capacity the able e-commerce bringing bit of does in page, although excess the is hour fill an with coming on new and SmartCast of the drive and a given and sustainability quarters. expansion given that you over part and SmartCast the past now I growth a like page, I Thanks. delta been home down of growth, am little what’s been hours rates narrowing. And But And and that clip, has delta to have been SmartCast good numbers? front. wondering things related inflection capabilities what it’s two those Your of between then at the in. of that growth home

Adam Townsend

about you they are Well, a correlation factors spending is us, really I ARPU. spent of for are the time between think time. their it matters think one and And to where drawing

to before, not be it to their add ARPU. hours to non-ad said someone our service, quarterly going that’s increases supported happens in in a have but I streaming, As

So, apps that channels upon the bringing have user that disconnect and monetization becomes great valuable where make we to other to us and content so sense, more every have and that in are our incumbent actually can so hour into and us that inventory monetization opportunity experience we it’s ad-supported that we that sure direction. great lift

what is time. our on for where So, for are. peers think there We That’s what those in their it just that at the ARPU. to We is are the room We an they of in and important depends spending some know consideration plenty of numbers factor. look marketplace market. know upside

have a time. it We for a long had riot

We have to we supports headroom short The made a lot as a much growth for go of of today. in have U.S. about, pretty from progress talked period, plenty marketplace we where are stronger here. than even numbers ARPU

and driving excited can growth. we So, execute keep how are against about we that

Scott Searle

Thank you.

Adam Townsend

You bet.

Michael Marks

joining. for a Thanks Scott and concludes today’s great call. thanks evening. Have everyone This

Operator

you everyone us today. for Thank joining

lines. disconnect You your may now

Vizio Holding (VZIO) 8 Aug 232023 Q2 Earnings call transcript