Advertising continues to be a growth contributor for smart TV maker Vizio, which reported Q3 earnings Wednesday.
For the three-month period, Vizio reached total net revenue of about $445 million, up 4% year over year.
While hardware sales of its smart TVs continue to be the biggest contributor of revenue, the device segment marked an 8% year-over-year decline, generating $248 million in net Q3 revenue. Smart TV shipments declined a well, down 5% yoy to 1 million in the quarter.
Vizio’s Platform+ business, meanwhile, which includes advertising and sponsorships on the platform including within its built-in WatchFree+ ad-supported streaming TV (FAST) service, as well as content distribution, grew 26% compared to Q3 2023, totaling $197 million in the most recent quarter.
Given its pending acquisition by retail giant Walmart, Vizio again didn’t hold the usual earnings call for investors, but earnings materials show that advertising revenue represented 82% of total Platform+ net revenue. And ad revenue saw accelerated growth of 31% yoy to reach $161 million in the period, which Vizio attributed to higher engagement and a growing advertiser base. In Q3 the company expanded direct ad relationships – meaning the number of advertisers that purchased inventory directly from Vizio in the quarter – by 20% compared to Q3 2023.
It also expanded programming on WatchFree+ with new channels including Military Heroes, Duck Dynasty, BBC Earth and BritBox Mysteries. In terms of engagement, Vizio reached 19.1 million active accounts for its SmartCast platform, representing an increase of about 300,000 accounts compared to Q2. SmartCast active accounts streamed 5.77 billion hours in the quarter. SmartCast Hours streamed per average account grew to 101 hours per month, up 5% yoy.
The remaining $36 million of Q3 Platform+ net revenue came from non-advertising revenue, which was up 8% yoy and Vizio attributed to continued growth in content distribution. In the quarter Vizio launched 26 new apps on its smart TV platform, including Lights Out Sports, Knight Time, Victory+, and Spirits Networks, growing the total number of built-in apps to more than 270.
Vizio also generated more average revenue per SmartCast user (ARPU), which stood at $37.17 at the end of Q3, up 18% compared the same quarter a year ago. Here again, advertising continued to be a growth contributor. Breaking out the category, in Q3 SmartCast advertising ARPU of $30.37 represented 82% of SmartCast ARPU – that’s a major jump from nearly five years ago in Q1 2020 when Vizio’s total quarterly ARPU was just $8.23, with advertising accounting for 28% or $2.29.
Rival streamer and device maker Roku reported Q3 earnings last week, where it generated $1 billion in quarterly revenue for the first time, reported ARPU of $41.10 and grew streaming households to 85.5 million. Despite that, Roku saw its stock sink after the earnings release, during which it disclosed plans to no longer report metrics related to streaming households and ARPU starting with Q1 2025.
Despite growing platform revenue on the back of advertising in the period, Vizio reported Q3 net income of $500,000 compared to the $13.8 million it posted in Q3 2023. Adjusted EBITDA of $8.8 million in the quarter also reflected a 67% or $18 million decline year-over-year. Vizio said Adjusted EBITDA for the three months ending September 30, included $10.6 million in acquisition-related costs and $3.1 million in cash incentive awards in lieu of equity payments in connection with the company’s long-term incentive plan.
The smart TV maker in Q3 expanded access to its WatchFree+ FAST service beyond the Vizio device ecosystem for the first time, making it available via the Vizio mobile app for iOS and Android devices. That move puts it more on par with other device-maker FASTs that can be accessed via mobile, such as The Roku Channel and Samsung TV Plus (the latter which recently disclosed amassing 88 million monthly active users).