Good morning, everyone. Thank you for joining us here at on day two of our BofA Global Tech Conference. I'm Wamsi Mohan. I cover hardware here at BofA. Super excited to have VIZIO with us today. We have the CFO, Adam Townsend. Adam, thank you so much for being here. Yeah, great. Good to see you, and thanks for having us. Yeah, no, absolutely. I guess, you know, to kick it off, right, maybe if you could just spend two minutes on really VIZIO, how it's positioned, where it's positioned, and sort of what are some of the trends you're seeing at the highest level, and then we can dive into questions. Yes, absolutely. I could talk about this for a long time. Yeah cutting off at the two-minute mark. Yes. Look, VIZIO's come a long way in its transformation of, from being just a hardware company to now being a hardware and a software with its proprietary operating system now in place. We're in 18 million homes on a monthly active user base perspective, and it's really transformed our business model from really only making money when we sold a TV, to now making money when people use that TV. That's just really a different position to be in the market, and because we have a fully integrated operating system with our hardware, we have the most robust ability to understand the user preferences, what they're engaging with. We have ad solutions for advertisers that can be very compelling and a high ROI for them, and that puts us in a very strong position in the marketplace as advertisers are trying to figure out how do they re-engage with viewers as they've moved out of linear TV and into more and more streaming. The eyeballs are moving, the dollars will follow. There's been some lag to that for a variety of reasons, as we continue to educate the marketplace about what we can bring to them in terms of solutions, the value proposition to consumers, we are right in front of this massive secular shift that's underway in terms of viewership trends and the ad dollars that will follow. We're focused on continuing to invest in creating a great product, great user experience, sourcing the content onto that platform that they can easily access, find, search, and discover using our home screen, which is a really important real estate in the home. It's very powerful for both content partners as well as ourselves to drive engagement into it. We've spent the last several years building up an ad sales team, some ad tech capabilities that enhance our ability to monetize that engagement. Now we're looking at not only how do we grow households, but how do we deepen the engagement with the existing base? As people are using more, spending more and more time in streaming, we wanna drive them into using more and more ad-supported content where we can serve ads, but do it in a way that brings the great experience to them as well. Relevant ads are much more tolerable. People enjoy sort of relevant ads versus, you know, irrelevant ads. Sure ... right? Everything that we're tooling around in terms of our software development, our engineering capabilities, is all designed to bring back to what I said, that great product, great viewer, viewing experience, great search and discovery, great engagement. Yeah. We feel like we have a strong hand. We're in the right place at the right time in terms of this massive shift that's underway, and we just have to keep our head down and keep executing. Yeah. No, absolutely. That's a great summary. maybe to kick it off gear on in terms of the competitive landscape, first on the device side. you guys have, you know, known and been in the TV business for a long time. there are been some changes you have made over the course of time with ACR technology. Mm-hmm ... and some other, you know, differentiated technology. As you look at the competitive landscape now, you've got, you know, Roku announcing a TV, you've got Amazon talking about TVs, you've got Apple with ski goggles. I mean. ... ... sort of a lot of different options out there. Yep ... how do you think about the competitive landscape and sort of the both the pricing dynamic and the opportunity to increase penetration in households that'll eventually drive your user base higher? Yeah. VIZIO was launched in 2002 with a core principle of bringing great value to the consumer, and that continues to be our core operating principle today. That shows up in a variety of ways. It's not just price. We're not the price leader per se. We're gonna be competitive. We're gonna have, you know, we're gonna be aggressive where it makes sense on pricing, but also bring a great quality to that price point so the overall value proposition is strong. That shows up in things like extending Wi-Fi 6 into our entire fleet, down to our entry-level units, which many of our competitors at that same entry-level product doesn't have that capability. Sure. We're willing to do that because we know it's so important to have a good experience for the consumer because it fits the rest of the business model. If someone's on a TV and the connectivity is weak, they're probably gonna stream less or not have a great experience. Yeah ... or, maybe even go get some other solution. We don't want that to happen. We wanna bring that great value to the consumer. Sure. We're gonna continue to be at the value end of the spectrum. We think as the quality is there and it's recognized, that there's opportunity for share gains, both from the bottom of the market, but also from the top. When people say, "Look, relative price and relative value here, I can get a great TV from VIZIO. Why am I paying more for some other brand?" We need to continue to keep establishing ourselves on that front. It drives the entire flywheel, the entire new, you know, kind of new platform business model. Do you think that there's an opportunity internationally to grow the space? There may be. I think right now our priorities are to focus on the opportunity in the U.S. There's tremendous headroom for growth here in the U.S. We've only been in this CTV marketplace, in terms of even having our own internal ad sales team, for abo ut three years, barely three years. It's early days for us. It's a very large market with all the right secular shift trends underway. We wanna stay focused and disciplined on this market. We know there's a lot of headroom to our ARPU opportunity. Yeah. We've grown that significantly over the last several years. We're now at roughly a $30 ARPU. We know some in the market are north of $40, we're looking to how do we close that gap as quickly as possible, actually look to surpass that. We think being in the U.S. only is the most monetizable marketplace for what we're doing. It gets diluted when you get outside of the U.S. You have to be very thoughtful about what markets make sense and the cost to enter those markets. For us right now, in terms of the runway we have ahead of us for U.S. to drive higher ARPU, to drive more growth. Like I said, we're an 18 million monthly active users. We want that to be much larger. You know, U.S. households, about 55% have a fully integrated smart TV today, so there's a growth opportunity there. If we play in front of all of these individual growth opportunities, it collectively, it creates tremendous potential for us. Where do you think that this active user base can go over the next couple of years? Look, we've been growing it steadily for the last several years, and I think there's room to go there. When you think about the total U.S. households, then you sort of look at shares across that. That's why it's important that we have a product that can gain share from both the top of the market... Yeah ... and the bottom of the market. That'll expand our opportunity to grow in the overall install base. We're focused on that. We're gonna keep pushing to have a great product that increases the probability that someone chooses VIZIO when they go into a store, and then they have a great user experience, and word of mouth is very powerful, right? People have a great experience, they talk about it. That's what we're focused on. I don't know, you know, where that will shake out yet, but we know there's plenty of room from 18 to where we can be. Okay, perfect. maybe pivoting now to the Platform+ side of things. Well, what are you seeing in terms of ad spend in the scatter ad market, and what verticals seem to be coming back worse this now? Yeah, look, we're quite pleased. I mean, I think you saw in the first quarter, we reported 24% year-over-year growth in our advertising business. Yeah. That outpaced our closest peers, based on the data that we looked at out there. We think the CTV market in general grew about 20%, and we, like I said, grew 24%. We believe CTV is the part of the market that's growing in overall advertising, and we're gaining share within that growing ecosystem. Not true necessarily for traditional, you know, legacy media companies. Sure. You're seeing a very different dynamic occur there. Again, back to the theme that we're in the right spot at the right time, I think that reinforces that further. On our first quarter call, we said that, ad trends were actually accelerating so far at that point in Q2, and that has continued now here throughout the quarter. We're pretty deep in the quarter now, and we're very pleased with the trends there. Excellent. In terms of where our outlook is, we feel very confident that we're gonna be able to put up good numbers against that. Fantastic. To the category point, though, I wanna make sure. These are the big TV categories that are coming in now, and now that we're more established, they're comfortable with us, and they're putting dollars to work with us. Our biggest growth is right now in telco, pharma, quick service restaurants. CPG has actually been quite strong. These are the financial services. These are the big TV categories, and that's exactly where we're seeing that same kind of growth from them. Again, part of it was getting on their radar, part of it's becoming part of their planning process, and then having seen those executions come our way. Can you give us some sense of like, you know, how that has changed on a year-over-year basis? Like, you know, because obviously, you guys have a more dominant presence now than you had last year. From a category standpoint, I think a year ago, we were sort of in all the categories. Now, we have multi brands within categories. We've actually grown our ad sales team to have more scale and capacity to have dedicated reps, you know, focused on particular categories. Yeah. That just gives us an opportunity to be in front of them more, to deepen those relationships, and bring bigger ad campaigns to us. We need more volume, more users in ad-supported content, so we can do bigger and bigger campaigns. You're seeing, you know, triple-digit growth across those major categories: telco, pharma, financial services. The exact point of, they are large categories, we've become more established, we're bigger than we used to be, we're now a scaled alternative in CTV. You don't have to just go to one or two outlets. We're now in the field, I think that that's actually bringing more dollars. What we see is advertisers will come to us, they'll dabble a bit, and then they'll increase their spend with us over time. Mm. We track, you know, how much recurring revenue we have from those clients, how much business is coming back our way, and what those dollars look like. To be able to drive triple-digit growth across very large advertisers and marketplace is pretty fantastic. Yeah. No, that's very compelling. well, how is engagement trading on Platform+? Quite good. I mean, I think we had some great stats in our first quarter, and, it's something I track very closely because it's not just. I know you asked about the size of the install base. Yeah ... but it's the quality of that install base as well. We are seeing an increase in time spent in a streaming environment as a proportion of total time on the TV. We track both those metrics. Yeah. Time spent in streaming reached a record high in Q1 at 54% of the time. That's great for us, 'cause that's putting them right in the place where we can monetize them the best. We look at it on an aggregate basis, so total hours served. That tells us the scale of our servable impression volumes, but also at a proactive user basis, and we're seeing an uptick there as well. I think, you know, we went through a dynamic around the pandemic, where there was a big lift in streaming, because there were a few alternatives for content. Sure. It had to ease off as live sports came back and regular programming came back, now it's continuing that longer-term secular shift that I'm talking about. For us to be hitting a record high in terms of time spent in streaming in this first quarter, just validates that that upward trajectory is underway. How are you thinking about sort of, you know, SmartCast hours? I mean, clearly, people are out and about a lot more. Is this a trajectory that you think can sustain growth off of these levels, and what kind of growth do you think is reasonable? Yeah, look, we do. We think that when people move into streaming, they don't necessarily go back, right? There may be specific reasons, like live sports or things of that nature. Sure. Even more live sports are coming to streaming platforms. Yeah. You see what Amazon- Yes is doing and others. I think it just keeps reinforcing that streaming is the distribution model of the future. Of course, there'll be a long tail of people who stay in traditional. I mean. Sure ... loyal to their set-top boxes. Yeah. In general, I think the population is moving in that direction, and that is a tailwind, to where we're positioned. We're looking for continued growth. It goes back. The onus is on us. Create a great experience, source the right content, use our data to inform us about what content to source. If we understand that part of our population, over-indexes in a certain genre, make sure you've got that content for them, promote that you have that content. Again, increase the probability that they engage with it. Yeah. Great for them, great for us. Absolutely. Can you talk about how the NewFronts and upfronts are going for you this year? Yeah, we're really encouraged. We had a great. This was sort of our third year of really presenting in the NewFronts process. Our first year, a couple of years ago, we did about $100 million in commitments. Last year, we announced that we did over $200 million in commitments. I'm not ready to predict this year's number, but I'm willing to bet that it will be nicely above last year's number. Okay. By just anecdotal evidence of the awareness of VIZIO in the marketplace. We had our upfronts, our NewFronts presentation in New York a few weeks ago. Standing room only, big attendance, even more people watched it virtually. The awareness that VIZIO is a destination to reach viewers has gone up significantly in the last couple of years, I think that only lends for more dollar commitments our way. That's, that's really impressive. Adam, you mentioned before ARPU, about $30. You, you know that some of the peers are getting, like, much higher. What are some of the specific drivers that you can sort of point to that get your ARPU, like, meaningfully higher? Look, I think it's really just time and market on a variety of things, right? Like I said here, the newness of us in the ad market, just more demand creates more, and as we have more scale and more time spent, as we're that user proposition. Yeah is working, that increases the ability to drive ad dollars. There's demand for our data in market. I think for us to be able to add products, analytics, services around that increases opportunity to monetize data. That's another source. We're very early in the subscription or the SVOD monetization piece. We launched our Vizio Account about a year ago, this summer, late summer. We've got to ramp that up in terms of people's awareness, that this is a great way to manage all of your SVOD services in one spot, turn them on, turn them off, but we monetize it. We have relationships with all the major services to be able to monetize that. That we were just later to come to that. Sure. We're there now. Yeah. That's another place to increase it. The other one that people don't think about a lot is our opportunity to monetize off device. Mm-hmm. We get really focused on what's the install base and what's the ability to extract from that install base. We have technology now that allows us to monetize across other platforms, off device into mobile inventory, using a lot of the same data and capabilities to make that an audience reach or audience extension opportunity for various brands. Really powerful, and I think that's critical because it allows us to address a bigger TAM than just our share of the install base. That's another area where I think you're going to see that tack on in terms of additional monetization. That's really interesting. Is there any appetite for VIZIO to have its own demand-side platform? We've looked at it from time to time. I think right now we really like our sort of neutral position. We're sort of agnostic and allow our ad customers to execute through whatever DSP they prefer. I think that sort of agnostic position has worked well for us. There's no rush or urgency to necessarily own it. We like that dynamic. We definitely skew more towards direct sold, allow them to execute programmatically or through whatever DSP that they would prefer. I think that's working for us. No need to necessarily go out and do it. We'll continue to create enhancements within our tech stack to improve fill rates and execution efficiencies and things of that nature. Obviously, I'd love to see people use more of our targeting data. Today, about 40% of the ad campaigns use some level of targeting. I'd like to see that be 60/40 the other way, right? Sure. For all the reasons that we know there's value for both the clients and the viewers themselves. We're gonna continue to bring services to the marketplace, increase the awareness to help drive exactly that. Overall, I think we've got a really, really strong hand to play. Adam, what about non-advertising revenue? You license part of your ACR data. What specifically do you license, and what do you not license? I put the data in two buckets. The first bucket is just viewership data. Persons two plus, just generally what's being watched. We have a great data set that, because of our glass-level data, it can capture viewership across any input to the TV. We understand what's being watched through cable, we understand what's being streamed, we understand even what game console and what title... Mm-hmm ... is being played. That's a very interesting thing. What we license out externally, just to be clear, is just the general viewership. Measurement companies use that, ad tech companies use that, networks themselves license that data because they want to be informed. That's great. We monetize it, and I think we've become sort of the currency in the market for that. We have the most robust or the biggest data set available to be licensed, and that obviously gives us great, you know, scarcity value of that data. Sure. The second bucket is the customer segmentation level. That's where the targeting capability comes in. That's where we have a better understanding of what that household tends to watch, what does that tell us about them? We can really help advertisers reach the right audiences using that. That works really well for them. It also works well, you know, in terms of, like, my point about viewer experience, more relevancy is better. That part we keep to ourselves. We didn't used to do that because we didn't have an internal sales force to actually use it. Mm. -in the right way. Now we do, and it makes sense to keep that level of data, to ourselves. You wanna target our viewers, you come through us, we can help you launch a campaign. how do you think about the growth of this licensing business? Look, it's gonna be, it's gonna be pricing driven. You know, I think we're at a scale that matters now, I don't think that necessarily that the incremental 2, 3, 4, 5 million more households really changes that dynamic. Okay. It's pretty representative now. It's based on actual viewership. It's not extrapolation of. Sure ... diaries or what people thought they watched. Right. Yeah. This is real time valuable data. I think we'll have pricing power, I think, as we wrap around it. Like I said before, services, tools, more analytics, more capabilities, so it's not just a data dump. Giving more resources to the end users, that makes it more valuable for them, and that can help us drive growth. We did see outsized growth over the prior year. We're now lapping on a deal we did with Nielsen for this data. That was a very large deal for us, we'll comp against that. The growth rate will moderate. Sure ... which makes sense as you're going against that. Now that we have that big additional client in our mix, those come up for renewals. These deals tend to be, you know, multi-year, two, three-year type deals, so renewal cycles will matter and help us kinda keep driving growth. Got it. Okay, that's helpful. Can you talk a little bit about the home screen? I think you mentioned it before. How are you monetizing that, and what sort of trends are you seeing there? Yeah. Our home screen is designed for, first and foremost, search and discovery for the consumer. What comes with that is an ability for content companies to promote their content or even their services as well, or to promote offers. We run with a lot of different partners, you know, 30 day at a special price, and then put it right there in the living room. Again, that real estate is incredibly valuable. It's at the moment of intent to watch. You can't get any closer. Yeah ... than in the living room. The value that it brings is pretty tremendous. We're architected to to help consumers find content they're looking for, but also monetize against that. We have multiple locations across the home screen that are that are paid for in a variety of ways. What we call the Hero Banner across the top is a rotating carousel of 8 placements that rotates, and that can be bought by HBO- I guess it's Max now. Yeah. Max, Disney+. We can even promote our own WatchFree+ FAST channel service on that as well. That's the decision we make. Do we promote, or we take other dollars from outside companies? That is a really valuable place. You can sponsor other genre categories in the same way. You can pay for placement of the app on the home screen. If you wanna be in that first row or second row, there's ways to do that. We're really designed to monetize that. It's a great destination for us, and it has a very high margin, over 90% margin to it because it's in-house sold. We pay commission to our salespeople. There's really no other, you know, slippage or leakage of economics from that. We think that continues to be really great for us. As the streaming battles continue, I can't think of a better destination to put a placement than right there in someone's living room. Yeah. Much more effective than a billboard on the side of the freeway. Oh, absolutely. It's tremendously valuable real estate. Yeah ... in a screen. What about your thoughts on audio shipments and how are you thinking about that business? Yeah, it's a great business for us. It's a higher margin business than TV. We like that. It's an add-on product, right? Right now, it's been a little bit soft because the consumer under pressure, right? If you need to replace the TV, you may or may not need to replace the sound bar. Sure. It's a little bit more discretionary spending. Yeah. For that reason, it's been, the trends have been a little bit softer. We are number one or number two in the market, depends on sort of the quarter and the measurement, but we're right there with a strong presence in that, in that business. What we've seen is that consumers are moving kind of upstream in terms of the more complex or more feature-rich soundbars. What I mean by that is that if you go from just a single soundbar, an all-in-one, 2-channel, all the way up to our 5.1 Dolby Atmos-capable with a rotating speaker that fires up off the ceiling when it detects the Dolby Atmos content. These are complex but really, really affordable, in-the-box home entertainment solutions. We have seen consumers move upstream in terms of wanting more and more of those capabilities, and that follows the trend on the TV side, where people are moving upstream in terms of screen size. There's definitely an upsizing going on across the marketplace right now. That works well for us as well because those larger TVs tend to monetize at a better rate. It's definitely accretive to our RPU. Yeah. As we move in that direction, that's very favorable. Yeah, that makes a lot of sense. What about any thoughts on spending on original content? Well, we're doing something a little bit differently. We don't think we need to chase or try to add to the clutter of, you know, big tentpole-type content. You're just not gonna compete with those scaled players. What we can do is something that they may not be able to do, which is look at the viewership data that we have and create interesting content with branding partners. We launched a VIZIO branding content studio, and the model for this is really a cost-plus model, right? You go out, and you say, "Okay, we're gonna three or four episodes of something that's sort of short form. I'll give you an example in a minute. Bring in a sponsor that pays for the production cost and then some, so we make a margin on it. We own that, and it sits in WatchFree+. It can be accessed at any time. We can run ads against it as people do access it, so there's additional longer tail monetization opportunity. It hones in on something that's sort of based on what we know our users have a high propensity for. A perfect example, going into March Madness, or the basketball tournament, we know we have, you know, 75% of our user base shows an interest in sports. We have a very high indexing viewership around food and leisure. We did something called 3 Pointer, which is basically, we brought in an actor from the Food Network, not Bobby Flay type person, right? Yeah. something recognizable, but more manageable. Sure. Did these short series around what are the signature cocktails and the food you're gonna serve at your March Madness party, and break that up. It was sponsored by BetMGM, so, you know, sports betting came in, sponsored it. Yeah. That model can work really well for us. Mm. It's interesting content for the consumer, it's great for the brands 'cause they can get out there. You can see how that can expand into a lot of different genres as well. That's kind of the way we're attacking that. You know, I think it's just good value add for our users, just to have some incremental, interesting, unique content there. We don't have to go out and take financial risk to try to make a show, hope someone watches it. Right. That's a very different, economic proposition. Yeah. This sounds, this sounds very targeted, but it's also really interesting. Yeah ... and in a way, the way to do it... Exactly ... using some of the data that you already have. That's right. ... to understand, like, where the interest levels will be. That's right. ... kind of lowering the risk of the capital deployment associated with it. Absolutely. Absolutely. Yeah. That's really interesting. Yeah. Can you talk a little bit about Household Connect? For those who don't know, can you describe how that extends, really, the reach? Yeah, when I was talking about monetizing off-platform. Yeah ... that's the name of the capability that we have. What Household Connect allows us to do is, we did it in partnership with Verizon. They have a over 200 million device graph-. Sure ... in the, in the U.S. What that allows us to do is go back to... We understand that mobile device is connected to the home that has the VIZIO TV. Yeah. Right? We understand sort of the viewership profile. Then we can go out and help them with audience extension campaigns into mobile ad inventory, to allow brands to either counter-program, extend, reach, or reinforce. If you're a particular fan of a show, for example, and maybe Max is advertising a show on our home screen, 'cause it's running their service right now, and they know you've had a propensity to watch that kind of content, it may be very valuable for them to then do some audience extension capabilities on mobile to reinforce. Sure ... in that environment, that, "Oh yeah, I gotta get home tonight and watch..." whatever the show may be, right? I think that's, it's just a great technology. It's a great way for us to leverage our capabilities and extend monetization out. I think our clients who are using it love that, because they can decide to reinforce, alter the message, counter-program against somebody else if they want to, but it takes that to a whole different, broader, TAM than just thinking about trying to maximize on our living room space. Yeah. No, that makes a lot of sense. I've asked all of the CFOs today, this question around. Sure AI, right? Oh, sure. And like- Yeah. Two questions, I guess. One, when you put your CFO hat on, look at productivity, are there things that you're doing with AI to improve productivity? Secondarily, from a product standpoint, is there anything? Yeah ... that you're thinking about? Absolutely. I mean, we are encouraged by AI. It's obviously early, and we're gonna be measured about how we think about it. We view it as a net positive to where we already are today. In operationally, as you brought that up, places like customer service, great opportunity to create efficiency there with speed to answer issues, questions someone may have, that can be handled by AI, and/or all of our service reps have to log their calls, take notes while they're trying to service the customer. The quality of those notes get improved with using AI, because it can just do it in a much more efficient way simultaneously while the call's going on. Yeah. That's just an operational example of what we can do. You reduce the call times, you reduce the speed to solution, and there's just immediate economic benefit there. That, that's one example. There's places around, you know, kinda simple, some code writing can be done this way, then we have editors. Sure ... and people who get involved and make sure that it's correct. There's elements of that that can happen. We've been using AI from a product standpoint, and AI is kinda a word everyone kinda broadly throws around. Yeah. Our recommendation engine capabilities is a version of that. Sure. Right? Understanding what someone's watching, recommending and placing recommendations on the home screen, again, to drive engagement. That's a place that we do that, and we can get smarter and smarter about that, using more sophisticated tools as well. Yeah. Yeah. Yeah. Yeah. A lot of places where I think it benefits us, on a net positive basis. That's even before getting into the content side. If people might make content driven by AI Right ... we certainly can be the distribution platform for that as well. Sure. Sure. Well, I think we're just about out of time, so maybe, if you wanna take the opportunity to talk to the audience about what's most misunderstood about the VIZIO story, and why is this maybe a particularly good time to think about investing in VIZIO? Look, I think we've gone through a pretty radical transformation in a compressed timeframe. We went from a company spent 18 years building awareness in the market as a brand around hardware. This Platform+ side is now really taking off. We've proven it. It was concept a couple of years ago. We did almost $500 million in Platform+ revenue last year. I think the street's at somewhere around $600 million for this year. Really different who we are today. Our Platform+ business is now about 30% of revenue and 98% of our gross profit dollars. I think that transformation happened quickly. We've now proven the trajectory that we're on, that we can do it, we can execute against this strategy. I think, frankly, the street has to catch up and understand how this works now, and that this model is really about this customer acquisition plus a lifetime value, and really rethink the way that the economics flow to the company. Yeah. You've shown excellent results so far, so best of luck in that. Thank you. Thank you so much, Adam. Yeah. Thank you for being here today. Thanks for having us.