Vizio Holding Corp. (VZIO)·Q4 2023 Earnings Summary

Executive Summary

• Platform+ continued to power the model: Q4 revenue was $502.6M (-6% YoY), with Platform+ net revenue $174.2M (+28%), total gross profit $98.1M (+14%), net income $13.2M (+110%), Adjusted EBITDA $23.9M (+20%), and record SmartCast ARPU of $32.48 (+15%) .
• Results exceeded prior internal outlook: Platform+ net revenue ($174M vs $162–$167), Platform+ gross profit ($105M vs $97–$103), and Adjusted EBITDA ($24M vs $7–$16) all came in above guidance ranges shared last quarter .
• Device headwinds persisted: Device net revenue fell 17% YoY to $328.4M, device gross profit was -$7.3M, and smart TV shipments declined 12% YoY to 1.3M in Q4 .
• Strategic overhang/catalyst: Walmart agreed to acquire VIZIO for $11.50/share; as a result VIZIO withdrew guidance and did not host a Q4 call, framing 2024 narrative around regulatory/timing and strategic combination benefits .

What Went Well and What Went Wrong

• What Went Well

  • Platform+ strength and ad momentum: Q4 Platform+ net revenue +28% YoY to $174.2M; management cited “accelerating ad revenue growth - up 36% year over year in Q4 - and record ARPU,” with direct relationships +32% .
  • Profit quality and margins: Company highlighted a record consolidated gross profit margin for a fourth quarter at 20% and record Platform+ gross profit of $105.4M (+27% YoY) .
  • Engagement and product execution: Active accounts reached 18.5M; SmartCast hours +15% YoY; record ARPU $32.48; software updates improved home screen, navigation, search, and responsiveness; added 24 apps (e.g., NFL) and WatchFree+ channels (now >290) .

• What Went Wrong

  • Hardware pressure: Device net revenue -17% YoY and device gross profit -$7.3M in Q4; shipments -12% YoY to 1.3M, highlighting ongoing competitive pricing and mix headwinds .
  • Top-line decline: Total net revenue -6% YoY to $502.6M despite Platform+ momentum, as device declines outweighed Platform+ growth .
  • Visibility: VIZIO withdrew all previously provided goals and outlook and did not host an earnings call due to the pending transaction, reducing near-term guidance visibility for investors .

Financial Results

Headline financials (USD millions, except per-share and ARPU)

Segment breakdown (USD millions)

KPIs

Notes:

• Management highlighted a record 20% consolidated gross margin for a fourth quarter, supported by high-margin advertising growth and selective promotional pricing .

Guidance Changes

Context: On Feb 20, 2024, Walmart agreed to acquire VIZIO for $11.50/share; VIZIO withdrew outlook and did not host its Q4 earnings call .

Earnings Call Themes & Trends

Note: VIZIO did not host a Q4’23 call due to the pending transaction . Themes below reflect Q2–Q3 trends and Q4 press release narrative.

Management Commentary

• “As we look back on 2023…Q4 [was] further evidence of the power and success of our integrated hardware and software model…record-breaking monthly active user base of 18.5 million…Platform+ net revenue…well ahead of our outlook…Our total company Q4 net income was $13M, up 110% and adjusted EBITDA…$24 million” .
• “Our advertising revenue grew 36% thanks to growth in large ad categories…We are encouraged by the green shoots…[M&E] up almost 20% year-over-year…supported by a 32% increase in direct advertising relationships” .
• “Given the pending Transaction, VIZIO will not host an earnings conference call or provide financial guidance…withdrawing all previously provided goals and outlook” .

Q&A Highlights

There was no Q4’23 call; below are key themes from the prior (Q3’23) Q&A for trajectory context:

• Device margin strategy and LTV: Management is comfortable with near-term negative device margins to acquire high-engagement accounts; blended ARPU near $30–$32 with ~60% Platform+ gross margin supports positive lifetime economics over ~6+ years .
• OS licensing to OEMs: Early discussions underway; viewed as TAM-expanding, offering partners deeper integration beyond “bolt-on” OS; economics still being defined .
• Advertising market dynamics: Upfront commitments up YoY with strong scatter; diversified category growth (CPG, QSR, insurance) mitigated M&E uncertainty .
• Engagement drivers: Home-screen redesign and new apps (e.g., ESPN, NFL) boosted engagement; home-screen interaction up 60% in Q3, translating to monetization lift .
• 2024 political ad tailwind: Expect strong cycle given local targeting via Inscape data and expanded local channels; improved sales/programmatic readiness vs 2022 .

Estimates Context

• S&P Global (Capital IQ) Wall Street consensus estimates for Q4’23 were unavailable via our tool at time of analysis; as a result, we cannot provide a definitive “vs. consensus” comparison for revenue or EPS. VIZIO withdrew guidance and did not host a Q4 call due to the pending Walmart transaction .
• Note: Q4 results exceeded VIZIO’s own previously shared ranges for Platform+ net revenue, Platform+ gross profit, and Adjusted EBITDA from the Q3 release .

Key Takeaways for Investors

• Platform+ inflection intact: Ads +36% YoY in Q4, ARPU a record $32.48, and direct advertiser relationships +32% underpin durable, high-margin growth .
• Hardware a managed headwind: Device revenue/margins remain pressured, but strategy prioritizes larger-screen, higher-ARPU households to maximize LTV and total system economics .
• Results topped internal ranges: Q4 beat VIZIO’s own outlook on Platform+ net revenue, Platform+ gross profit, and Adjusted EBITDA—supportive for confidence in monetization levers even amid device softness .
• Visibility muted near term: With guidance withdrawn and no Q4 call due to the Walmart deal, near-term catalysts hinge on regulatory/closing milestones rather than standalone guidance beats .
• 2024 setup: Political ad cycle and continued Platform+ scaling are medium-term positives; OS licensing remains a potential incremental lever once strategic path clarifies post-transaction .
• Trading lens: In the interim, stock reaction is likely driven by transaction updates and perceived synergies for Walmart Connect with VIZIO’s CTV ad stack, more than by quarterly cadence .

Appendix: Source Documents Read

• Q4’23 8-K (Item 2.02) and Exhibit 99.1 press release and financials .
• Q3’23 earnings press release and full transcript for trend/Q&A -.
• Q2’23 earnings press release for prior-quarter baseline .
• Q4’23 earnings presentation (beats vs guidance) .
• Walmart–VIZIO transaction press release (context) .