vzio-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40271

VIZIO HOLDING CORP.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________


Delaware	3651	85-4185335
( State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)
39 Tesla Irvine, California	(949) 428-2525	92618
(Address of principal executive offices)	(Registrants telephone number, including area code)	(Zip Code)

_____________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

VZIO

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of May 3, 2024, there were 122,126,431 shares of the registrant’s Class A common stock outstanding, 76,180,453 shares of the registrant’s Class B common stock outstanding, and no shares of the registrant’s Class C common stock outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and March 31, 2023	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31 , 202 4 and March 3 1 , 2023	3
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and March 31, 2023	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 4 and March 3 1 , 20 23	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	75
	Signatures	76

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “could,” “would,” “will” or the negative of these terms or other comparable terminology. In particular, statements regarding our plans, strategies, prospects and expectations regarding our business are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

•our pending merger with Walmart Inc., including our expectations around the timing and completion thereof;

•our ability to keep pace with technological advances in our industry and successfully compete in highly competitive markets;

•our expectations regarding future financial and operating performance, including with respect to our Device business and the growth of our Platform+ business;

•our ability to continue to sell our Smart TVs;

•our ability to attract and maintain SmartCast Active Accounts;

•our ability to increase SmartCast Hours, including to attract and maintain popular content on our platform;

•our ability to attract and maintain relationships with advertisers;

•our ability to adapt to changing market conditions and technological developments, including with respect to our platform’s compatibility with applications developed by content providers;

•the impact of geopolitical events and volatile market conditions, including those that may affect manufacturing, supply chain and logistics;

•the impact of macroeconomic conditions, including uncertainty in the global banking and financial services sectors, recessionary fears and high interest rates that may reduce consumer discretionary spending;

•our anticipated capital expenditures and our estimates regarding our capital requirements;

•our anticipated investments into our technologies and capabilities;

•our ability to plan and execute our sales strategy during seasonal fluctuations in supply and demand;

•the size of our addressable markets, market share, category positions and market trends;

•our ability to identify, recruit and retain skilled personnel, including key members of senior management;

•our ability to promote our brand and maintain our reputation;

•our ability to maintain, protect and enhance our intellectual property rights;

•our ability to introduce new devices and offerings and enhance existing devices and offerings;

•our ability to successfully defend litigation brought against us;

•our ability to comply with existing, modified or new laws and regulations applying to our business, including with respect to data privacy, environmental requirements, taxation and security laws;

•our ability to implement, maintain and improve effective internal controls; and

•our ability to maintain the security and functionality of our IT Systems or to defend against or otherwise prevent a cybersecurity attack or breach and to prevent system failures.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

VIZIO HOLDING CORP.

Condensed Consolidated Balance Sheets

(Unaudited, in millions except par values)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	202.8	$	221.6
Short-term investments	131.1		129.9
Accounts receivable, net	267.9		381.2
Inventories	25.6		6.8
Income tax receivable	11.9		9.0
Prepaid and other current assets	56.9		45.9
Total current assets	696.2		794.4
Property, equipment and software, net	19.1		19.7
Goodwill	44.8		44.8
Deferred income taxes	49.6		49.6
Other assets	51.7		52.2
Total assets	$	861.4	$	960.7

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable due to related parties	$	75.8	$	109.1
Accounts payable	123.4		157.8
Accrued expenses	144.8		178.6
Accrued royalties	40.1		40.7
Other current liabilities	7.9		5.8
Total current liabilities	392.0		492.0
Other long-term liabilities	18.7		19.4
Total liabilities	410.7		511.4
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100.0 shares authorized and no shares issued and outstanding as of March 31, 2024 and December 31, 2023	—		—
Common stock, $0.0001 par value; 1,350.0 shares authorized as of March 31, 2024 and December 31, 2023 •Class A, 122.1 and 125.3 shares issued and 122.1 and 121.5 shares outstanding as of March 31, 2024 and December 31, 2023, respectively •Class B, 76.2 shares issued and outstanding as of March 31, 2024 and December 31, 2023 •Class C, no shares issued and outstanding as of March 31, 2024 and December 31, 2023	—		—
Additional paid-in capital	427.9		414.3
Accumulated other comprehensive loss	(0.4)		(0.3)
Retained earnings	23.2		35.3
Total stockholders’ equity	450.7		449.3
Total liabilities and stockholders’ equity	$	861.4	$	960.7

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIZIO HOLDING CORP.

Condensed Consolidated Statements of Operations

(Unaudited, in millions except per share amounts)


	Three Months Ended March 31,
	2024		2023
Net revenue:
Device	$	194.3	$	231.2
Platform+	159.6		125.5
Total net revenue	353.9		356.7
Cost of goods sold:
Device	201.5		229.6
Platform+	71.3		51.7
Total cost of goods sold	272.8		281.3
Gross profit:
Device	(7.2)		1.6
Platform+	88.3		73.8
Total gross profit	81.1		75.4
Operating expenses:
Selling, general and administrative	76.1		58.2
Marketing	8.5		7.6
Research and development	15.1		11.9
Depreciation and amortization	1.2		1.0
Total operating expenses	100.9		78.7
Loss from operations	(19.8)		(3.3)
Interest income, net	3.9		2.4
Other income, net	0.7		—
Total non-operating income, net	4.6		2.4
Loss before income taxes	(15.2)		(0.9)
Benefit from income taxes	(3.1)		(0.2)
Net loss	$	(12.1)	$	(0.7)

Net loss per share attributable to Class A and Class B stockholders:
Basic	$	(0.06)	$	(0.00)
Diluted	$	(0.06)	$	(0.00)
Weighted-average Class A and Class B common shares outstanding:
Basic	197.9		195.3
Diluted	197.9		195.3

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIZIO HOLDING CORP.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited, in millions)


	Three Months Ended March 31,
	2024		2023
Net loss	$	(12.1)	$	(0.7)
Other comprehensive loss:
Foreign currency translation adjustments	(0.1)		—
Comprehensive loss	$	(12.2)	$	(0.7)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIZIO HOLDING CORP.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited, in millions)


	Three Months Ended March 31, 2024
	Preferred Stock(1)			Common Stock(1)(2)(3)		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
	Shares	Amount		Class A	Class B
Balance at December 31, 2023	—	$	—	121.5	76.2	$	414.3	$	(0.3)	$	35.3	$	449.3
Share-based compensation expense	—	—		—	—	13.1		—		—		13.1
Shares issued pursuant to incentive award plans (net of shares in lieu of taxes)	—	—		0.7	—	0.5		—		—		0.5
Foreign currency translation	—	—		—	—	—		(0.1)		—		(0.1)
Net loss	—	—		—	—	—		—		(12.1)		(12.1)
Balance at March 31, 2024	—	$	—	122.1	76.2	$	427.9	$	(0.4)	$	23.2	$	450.7



	Three Months Ended March 31, 2023
	Preferred Stock(1)			Common Stock(1)(2)		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings(3)		Total(3)
	Shares	Amount		Class A	Class B
Balance at December 31, 2022	—	$	—	118.1	76.8	$	366.9	$	(0.3)	$	7.1	$	373.7
Share-based compensation expense	—	—		—	—	8.0		—		—		8.0
Shares issued pursuant to incentive award plans (net of shares in lieu of taxes)	—	—		0.6	—	1.7		—		—		1.7
Net loss	—	—		—	—	—		—		(0.7)		(0.7)
Balance at March 31, 2023	—	$	—	118.7	76.8	$	376.6	$	(0.3)	$	6.5	$	382.8

(1) There were no shares of Preferred Stock or Class C common stock issued or outstanding as of March 31, 2024 and December 31, 2023.

(2) As of both March 31, 2024 and December 31, 2023, the par value on common stock outstanding was $20 thousand.

(3) Totals may not foot due to rounding.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VIZIO HOLDING CORP.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in millions)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(12.1)	$	(0.7)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2.9		1.8
Realized gain on investments	(0.4)		—
Amortization of premium and discount on investments	(1.8)		(0.5)
Change in fair value of investment securities	—		(0.1)
Share-based compensation expense	13.3		8.2
Change in allowance for doubtful accounts	(0.2)

SEC Form 10-Q filed by VIZIO Holding Corp.