Electronics manufacturer Vizio grew the number of customers using its SmartCast streaming television platform to 18.8 million during the second financial quarter (Q2) of the year.
The number represents an addition of 200,000 SmartCast users who purchased or activated a Vizio smart TV set during the three-month period that ended in June.
Vizio said its 18.8 million SmartCast users streamed 5.6 billion hours during Q2 — the exact same amount of streaming hours it reported in Q1, which suggests individual users streamed slightly less content on average compared to the prior financial quarter.
While time spent watching content might have waned on a per-user basis, Vizio continues to see its platform and advertising business outpace hardware sales. Platform and advertising revenue clocked in at $169.4 million during the quarter, a 19 percent increase on a year-over basis and around $10 million more when compared to Q1. Gross profit from Vizio’s platform revenue came in at $99.5 million, up 16 percent on a year-over basis and $18.4 million higher than the prior quarter.
Vizio’s platform revenue includes advertising inventory sold against the home screen of its smart TV devices, as well as ads inserted into shows and movies available through Vizio’s free, ad-supported streaming TV (FAST) service, WatchFree Plus. Vizio also offers a platform called Vizio Account, where customers can purchase goods, services and subscriptions from within the Vizio mobile app, using the same billing information on file with their smart TV. Vizio earns a commission whenever a user purchases something through Vizio Account.
Smart TV shipments grew to 1.2 million during Q2, an uptick of 15 percent, though shipments does not necessarily correlate to sales. The company defines “shipments” as smart TV units that are sent to customers who purchase directly from Vizio, or retailers who have ordered TVs for their warehouses or store shelves.
Device revenue from the sale of smart TVs and soundbars was $267.9 million, of which Vizio earned around $900,000 in profit, the company said. Its device revenue was 6 percent higher on a year-over basis, while its device profit was 200 percent higher. Average revenue per user, or ARPU, came in at $35.39 during Q2, or 16 percent higher on a year-over basis, spurred by an increased number of SmartCast users and higher platform ad buying.
Vizio’s platform and advertising business is a large reason why retail giant Walmart announced it was purchasing the electronics maker for $2.3 billion earlier this year. The acquisition is believed to give Walmart an opportunity to better target cost-conscious consumers who are attracted to Vizio’s low-priced, feature-filled smart TVs. The acquisition is still pending regulatory approval; in March, the Federal Trade Commission has asked both companies to provide more information about the transaction.
Vizio declined to hold a conference call with investors or offer projections about its future earnings, citing the pending Walmart acquisition. The company is still publicly-traded, and is required to file quarterly financial disclosures until its deal with Walmart closes.
