Q4 2022 Vizio Holding Corp Earnings Call
Quality across our fleet is key to a great consumer experience.
This past year, we also dramatically enhance the user experience and expanded our content offering.
Turning on the successful growth of our watch three plus app.
We unveiled.
Upgraded designed and an improved user interface.
Latest update brings a new look and feel intuitive electronic programming guide faster and easier navigation and personalization features as well.
With all of these new enhancements.
No surprise.
That was III plus remains the number two most watched free AD supported app.
Our platform.
In addition to some of these new enhancements will.
Panthers are building <unk> partners like stars A&P.
<unk> plus <unk>.
Sports.
Desktop screen.
Amazon music and many more.
During the fourth quarter, we grew our smallcap exited account base by 15% to over $17 million.
And these users remained highly engaged.
With time spent on our platform.
Growing 24% year over year.
We're such a seamless out of the box experience. It is no surprise.
The consumers.
Most of their time on our Tvs streaming SaaS content offering.
With more user engagement and greater scale, we are in a strong position to support our advertising partners with more efficient and measurable marketing experience.
Our advertiser with initiatives continue to expand those brands recognize the value of direct to device, that's our own inventory and ACR data Gibson onscreen validation and proof our campaign outcomes.
During the quarter.
Our advertising clients reduce ship with almost 400 advertising partners across verticals like automotive.
Media and entertainment CPG quick service restaurants and retail.
Our advertising business is growing rapidly with revenue up 55% in 'twenty two.
We also recently announced that we concluded our 2023 upfront negotiations with more than $200 million.
In direct advertising commitments, while agency holding companies.
Turning to our device segment 2022 was a challenging year.
Our funds.
But our team was well ahead of the Kurt.
Our teams navigated a difficult environment that will supply and then demand constrained.
But despite all that we continue to deliver award winning product to the market.
Our passion for innovation to support on the hardware side with our new TV collection being recognized was 16 editorial awards in 2022.
More recently, we were named wire cutters budget take for best OLED TV for N series content.
<unk> TV.
Incredible value also trickled down to a Dolby Atmos potash.
And we will work secrets of home theater as some bar of the year for the industry's elevated.
Thanks to the success of our dual business model, we have opportunity to continue impacting and innovation to elevate our award winning devices even further.
I'm very excited about what the future holds for us.
And with a strong dedicated and disciplined team that is focused on innovating for the future to create a better consumer experience there will be lots more to share in 2023.
The overall business environment remains dynamic but.
As always we are focused on what we can control.
And while advertising spending growth started strong in 2022.
It was a softer end market to close the year.
But we are cautiously optimistic for a stronger 2023.
With the right team in place.
We know we're in a great position to reap the benefits.
Operating a powerful dual business model as market conditions improve.
With that I will now turn the call over to Adam to review, our fourth quarter results in more detail.
William before opening the call to questions I will take you through our fourth quarter results and discuss our outlook for Q1, starting with the fourth quarter total company revenue came in at $533 million.
Breaking this down into our segments total platform plus revenue grew 30% to a new quarterly record of $137 million.
This represented 26% of total company revenue in the quarter up from 17% a year ago growth in platform plus revenue was driven by advertising, which rose 25% to $103 million. This marks our first single quarter, where advertising revenue surpassed $100 million.
A great milestone for the team.
Within our advertising business, we continued to expand our direct AD client relationships over the past year. We have expanded the number of brands. We have worked with by 66% to over 1400 advertisers across categories continue to place value on our premium streaming AD inventory and cross platform offerings.
In addition, the number of brand spending in our managed service offering which provides an opportunity to access our real time, ACR targeting and analytics suite grew by 37%.
The tools, we provide advertisers are well recognize from our owned and operated inventory to our unique data targeting and measurement capabilities. These assets create a great opportunity to gain wallet share for vizio amongst top advertisers investment plans.
Overall, we are highly encouraged by the 25% growth in our advertising revenue during the fourth quarter. Despite the highly publicized downturn in the AD market late in the quarter, which led to revenue coming in just under our expected range, our advertising growth rate relative to many of our peers showed tremendous strength in a tough environment.
Non advertising revenue grew 46% to $33 million within our non advertising revenue data licensing was again the largest contributor to growth with additional strength from healthy demand for brand placement on our remote control buttons.
Data licensing was up 55% year over year our.
Our currency great viewership data is highly valuable in the marketplace and relied on by measurement companies agencies and networks alike.
While we anticipate the demand for this valuable data will drive continued growth we expect the growth rate to begin to moderate in Q1 as we start to lap the step up from the Nielsen deal, which commenced around this time last year.
Turning to our device segment total revenue was $397 million.
The year over year decline in device revenue was due to the combination of lower average selling price a more aggressive promotion campaigns than a year ago and fewer smart TV shipments.
TV unit sell through volumes grew year over year as consumers responded favorably to the promotion offers.
As our mix of business continues to shift toward a larger contribution from our higher margin platform plus business total company gross profit grew 11% for the quarter to $86 million.
Platform plus gross profit was a record $83 million.
Up 23% over the year ago period, representing around 97% of the total company's gross profit. This too came in just under our expected range for the quarter as the high margin advertising revenue slowed late in the quarter platform plus gross profit margin was still a solid 61%.
Total company adjusted EBITDA for the quarter was $20 million up 15% over the year ago period. As we've stated previously we remain vigilant in managing our SG&A expenses, while continuing to invest in new features and capabilities. We plan to remain focused on operational efficiencies and expense management to allow us to reinvest back into the business to support compare.
<unk> and drive future growth opportunities.
Now turning to our key performance metrics as William mentioned, our Q4 results highlight the growing success of our efforts to drive overall monetization across the platform.
Smart cast ARPA grew to a record $28 30.
Up 31% over the year ago period.
Total time spent streaming also outpaced all other times spent by our users as measured by 24% increase in smart cast hours against a 13% increase in total vizio hours.
User adoption of streaming on our platform continued its upward trajectory demonstrated by further growth in streaming time spent per active account.
Smart cast active accounts grew by almost 800000 sequentially and $2 $3 million year over year to a new record $17 4 million.
So with that let me now turn to what we expect for the first quarter.
We are encouraged by the resurgence in advertising activity, thus far in the quarter, particularly with respect to demand for video inventory and.
In this area are key categories for US include auto insurance pharma, and telco, which are all showing a pickup in activity. So far in the first quarter we.
We do expect the media and entertainment category to lag as the industry works through their own priorities that said our data continues to support a compelling argument for advertising on our home screen.
It is a highly visible and engaging placement right in the living room were intent to view couldnt be higher.
On device, we expect the TV markets remained highly competitive our first party viewership data informs our pricing strategies and we will continue to remain aggressive and seek to gain share, particularly in units that support our business model best.
For Q1, we expect platform plus revenue to come in between $114 million and $119 million, representing 14% growth at the mid point keep in mind that within platform plus revenue. We are expecting video advertising to outpace home screen and as I mentioned, we will begin to lap last year's data licensing deal with Nielsen So the non <unk>.
Advertising growth rate should start to moderate from last year's accelerated pace. In addition, we are making investments in critical add infrastructure to support our platform plus business and AI solutions to create efficiencies and engineering support and logistics.
We expect platform plus gross profit of between $66 million and $70 million for the quarter and finally, we expect total company adjusted EBITDA in the range of flat to positive $5 million.
In closing.
Advertising spending in user adoption of connected TV continues to be where the growth is across the industry.
Smart TV households continue to expand cord cutting is accelerating and the age of Avon is here.
<unk> is incredibly well lines to benefit from these tailwind.
Since the launch of our platform plus business only three years ago. We have successfully increased our active user base by two three X and grown <unk> by almost Forex looking forward, we now have greater scale and a stronger presence in the marketplace, which puts us in a great position to continue to execute on our strategy and we are excited about the opportunities that lie ahead.
With that let's open up the call to questions operator.
My apologies as a reminder, extra I'd like to ask a question. Please press star followed by one.
On your telephone keypad.
I'd like to withdraw your question. Please press star followed by two.
Please show your Hanmi to likely when asking your question.
Please limit yourself to one question and one follow up question only before re entering the queue.
Operator, we will take the first question.
Okay.
First question for today comes from Laura Martin of Needham Laura Your line is now open. Please go ahead.
Good afternoon. My first question is for William around competitive.
And development several key chapters announced it's going to do an integrated operating system at CEB.
You can take a victory lap on that because youre right about that but my question is as an analyst it is.
That mean that over the next two years and say in theory catch up with you with its integrated.
Integrated PV and hardware.
Comes a price war, because the only way to compete on price.
And staying with competition.
Amazon, Google and welcome all now have home devices as well.
On the smart Tvs were they on the hardware and software. So my question is are you going to do you have an update us in a while and once again home device strategy should we expect to see cost.
<unk> expenses invested in home devices in 2020, Thanks Helane.
Yes. Thanks.
Sure.
We'll be doing that.
Well the last 20 years so having.
Competition.
Nothing newsworthy.
Again, we've built a great deal of business model versus everybody.
Andy.
But I do see the competition to be.
Pretty strong in the next few years have been the new players such as Roku coming in.
To compete in the device space directly.
Right.
We have the experience and we have.
We will have.
The knowledge and.
We will be ready.
I think the competitors causes.
The new <unk> device maker, we will have a lot to learn in the next few years and we're ready to compete.
And as far as Brazil.
Second question on connected home I think.
With the macro economy.
I don't think it is.
That's where our interest to spend a lot of money on connected home as of now.
I do believe the money will be spent.
We'll likely.
TV I think we have a lot more room to grow allowing individual component of the TVN, we really don't need to.
Euro LIBOR to control our lives at home. So we're pretty excited with just our current opportunities. So.
As of now we do not have.
Connected Tonight, the home strategy.
Right.
Okay, Great and then my follow up question.
Or Michael you guys have continued to have really do a great job of adding new advertisers last quarter and next quarter. My question is when you are.
Do you break in and category and then a lot of guys follow you and is there any pattern recognition, we can see in the type of new advertisers who've been added over the last six months.
Yes, Thanks, Laura I think look coming out of Q4, there was definitely some some softness in the AD market I think we saw it especially in December but.
As you pointed out in the face of that softness.
We were able to add once again I believe of 130, new advertisers to the platform.
And.
That helped us push to grow platform revenue, 30% in the quarter year over year finish out 55% up for the full year. So so positive trends there in terms of where we're seeing the growth in categories. I think was exciting for US is we're starting to significantly grow other categories outside of media and entertainment.
Expand from CPG <unk> pharma all of those categories were up a 100% year over year or quarter over quarter on the year. So couple that with the significant upfront commitments we have.
While there is softness in Q1, and I think I've mentioned, we're cautiously optimistic.
About the Q1 rebound we are seeing.
I think we're well positioned for continued growth and continued expansion of those categories specifically.
Thank you.
Thanks, Laura operator, we'll take the next question.
Our next question comes from Tom Champion of Piper Sandler. Your line is now open. Please go ahead.
Hi, Thanks. This is Jim on for Tom Thanks for taking the question.
I guess first on advertising is there anything to call out from.
Sort of the off platform component that could be having an impact and.
And second I guess are you, making any changes on how you run the business in a more.
Growth constrained environment.
Thanks.
Okay.
Yes, I think for off platform question I'll take that.
Yes, we see continued growth from household kinect.
Today.
It is the fastest growing AD vertical we have.
And as a reminder, household connectors are.
Our audience extension product that enables us to recognise viewer.
<unk> data or what people are watching on the screen and target them.
Inside the home and outside the home on other devices, whether it be mobile desktop tablet.
And for US it's been a great product for US it's helped us expand the Tam off platform helped us expand our deliver incremental reach for advertisers allows us to tap into some new budgets.
And we're actually continuing to add partnerships to build more scale. There. So we recently launched a partnership with tap AD to drive additional capabilities as well so while it is the fastest growing category it still coming off a smaller base. So so it's an important component for us for those reasons I mentioned, but video.
Still be.
The largest acceleration for us in 2023, specifically within water plus.
Yes, Jeff This is Adam on your second question, if I understood. It correctly, just thinking about the macro environment.
Phrasing. It is a growth constraint environment I think I think what we're doing from a management standpoint is really focusing as I mentioned on controlling what we can control, which is principally around our costs. We're really looking at efficiency, we're looking at head count growth.
As you know over the last couple of years, we've been in a pretty rapid expansion mode, where we really increased the size of our <unk>.
Add sales team our AD tech capabilities, our engineering resources and that was an important investments sort of get us to where we are today and build up to the scale that we have now.
<unk> created and so from here forward, we are going to be a bit more.
Cautious about growth and expenses, we're looking at head count very very carefully, but we also want to continue to invest in the features and capabilities that are going to bring that future growth. So in this environment, where every dollar we can save allows us to.
Put that back into the business to be competitive on the device side to attract and retain the right kind of talent.
And also set us up to take advantage of the rebound and when the macro environment strengthens, but what we want to do is basically get the company in a position to really be ready to drive significant growth with a stronger tailwind, but even even given that as you have heard on this call here today, even in a relatively growth constrained environment.
Our AD business grew 25% in the fourth quarter, 55% for the year really strong growth because we are in the middle of the rapidly growing part of the market and we are continuing to take share within that rapidly growing part of the market. So we're going to continue to set ourselves up for future success.
Great. Thank you.
Okay.
Thanks, Jami operator, we'll take the next question.
Our next question comes from Cory Carpenter of Jpmorgan Cory. Your line is now open. Please go ahead.
Thanks.
Maybe one for you and one for William just on EBITDA sticking to that.
Last quarter I think <unk>.
The lowest profit quarter of the year, just curious any color you can give us on how you expect.
That's expensive to progress through the year is it reasonable to think <unk> would be the point again in 2023 and aiming for William just hoping you could talk a bit about your decision there.
This need to expand the board. Thank you.
Okay.
Yes, Corey yes, so typically given the cadence of the business and seasonality Q1 does tend to be lower period, obviously from the on the device side, we're coming off of the holidays.
A lot of demand.
Into the Q1, where there is some opportunities like the Super Bowl for example.
But we also are mindful of the environment and the consumer demand levels. So as we said before we want to be competitive we're going to be aggressive on pricing those strategies are going to be informed by the data that we have around usage, we understand and look at our pricing strategies from a customer lifetime value standpoint.
So that all gets factored into our considerations. We're also mindful of the mixed signals that are going on in the macroeconomic environment on the advertising side as Mike said January was a little bit slow February picked up a lot and again cautiously optimistic as the term.
Certainly hopeful that those high margin dollars come in but given the mixed signals out there I think it's prudent to be conservative on that front. So I think that sets us up and then we'll see how the year progresses, what kind of strategy, we need to deploy to move product on the device side, because remember as we sell through units into homes that is the foundation for us to then grow.
So the flywheel against our platform business right and so they're.
They are being competitive gaming homes, that's really core to long term success.
So, yes, I couldnt be more excited that Mike Mohan.
Joining us on our board.
To us years 30 years of experience in the consumer electronics space retail our software logistics supply chain.
I don't think we can find a better candidate to help us through coupon.
To help US guide us to grow our business and also.
Yes.
Great experience.
Beyond the multiples are on board.
The Board, let me, Brian Petco Jackson family winery.
Yes, it really help us to guide us to the next stage.
Okay.
Great. Thank you Beth.
Thanks Corey.
Later, we will take the next question.
Yeah.
Our next question comes from Ben Swinburne from Morgan Stanley . Your line is now open. Please go ahead.
Thank you good afternoon.
Two questions, maybe first on media and entertainment I think Adam you called out weakness, there, which I think we're all sort of aware of the drivers of that.
Can you help us think about the exposure between home screen and video advertising. It sounds like that's a bigger factor in homes can I just wanted to hear you sort of confirm that and walk us through how we should think about.
That part of the business as we move through 'twenty three.
And where you think that might be a point of pressure and where it might actually start to alleviate itself and then more on the TV and smart TV side, you guys have a sense of whether you gained share last year in sort of the north American marketplace and do you expect the overall market to grow in 'twenty. Three I know you are not typically forecasting for the industry.
But given the pressures we've seen in the last couple of years would appreciate your perspective. Thank you.
Yeah, Ben Thanks, So as you can imagine the home screen is very.
Prone for the median entertainment category, obviously, youre highlighting not only content, but also the services themselves. It's also a great place, where we can run promotions.
With.
With various partners we've done.
Done deals with virtual Mvpds for example, our Apple TV service or various others on that home screen. So I think there's a lot of reason for the growth partners to understand the power of our homescreen, whether they are trying to attract or retain viewers as well as potential new subscribers to their services and so I think that the.
It is a high margin revenue source for us. So if there is a mix shift there and something just to consider as we go through the dynamic video is going to continue to outpace the growth of home screen. We certainly have been planned for that and that is factored into our considerations and forecasts, but it's a very effective destination right. There in the home right, where as I mentioned review.
Or intending to view it can't be a better place for a content company to promote themselves microphone anything to the dynamics of that yeah. I think when we think about the whole screen as well, it's not just limited to media and entertainment and I think thats, an important growth opportunity for us, especially this year.
Obviously homescreen incredible incredibly valuable tool for us for monetization, it's a firsthand consumers see when they turn on the TV Alright, I continue to say, we've got the best UI for search and discovery in the marketplace.
But those huge titles great creative our ability to leverage data creates other opportunities. So for us we've seen an expansion in what we consider non endemic or non media and entertainment sponsorships.
Q4, we were up 37% year over year.
Bringing partners like Geico in.
Sponsor, our Halloween collection or Mcdonald's into to sponsor our football kickoff collection.
We're also able to touch kind of outside of what we would consider the core kind of.
<unk> partnerships, we've expanded our relationships with studios right working closely with them in particular to boost kind of the impact of box office premiers.
And then we see a lot of opportunities and leveraging the data we have.
Two to attract game play.
And expand into the gaming category tied into our home screen. So so as Adam pointed out video will continue to grow faster than home screen, but from a home screen standpoint, there continues to be good opportunities for for us to extend expand our customer base outside of core media and entertainment.
And then then on the market share point, yes, we don't we're not in the business of predicting necessarily the overall market, but we do look at some third party research out there I've seen a range of kind of what I'll call sort of flattish for the year remember, we're coming off of still.
The post Covid period, where there was a big demand.
Serge and then there were supply chain problems and then now we were facing inflation and constrains on consumer discretionary spending so.
We understand that and we're going to be competitive in that marketplace.
We think we've got a great value proposition to consumers, we're bringing out new features adding more content to the platform, making it just a better and better overall experience for our consumers and we think we've got a great voice in the market on that and so part of it will be pricing, we're going to we're going to have strategic pricing plans in the market as we did last year as you may recall last year, we were able to go out and still.
We made a lot of reaction to our to our Tvs with our 50 inch and 40 inch where we had the number one and number two selling Tvs in the market through most of last year. So we'll look for opportunities to stimulate demand and play in that marketplace, but overall it's about.
Increasing our install base increase in our active account base and driving <unk> off of that.
Thank you guys. Thank you.
You bet. Thanks, Ben Operator, we'll take the next question.
Our next question comes from Steve <unk> from Wells Fargo. Steve. Your line is now open. Please go ahead.
Thank you maybe first just wondering what kind of growth you're expecting this year in smart cast hours.
It's remained actually pretty robust in terms of the growth rate year on year, but I know you've talked over the last few quarters about trying to introduce more products that are designed to get to more kind of the primary television in the house. So just wondering if youre seeing any of that benefit mix shift tailwind, yet or if it's a little bit too early.
And then just as a follow up on an <unk> services, like Netflix and Disney plus and HBO and they are really pushing more into <unk> and.
Your demographic overlap is maybe more to the Avon centric consumer is there an opportunity there that <unk> been able to tap into to be a marketing partner with any of those services and is that something that could.
Sort of support your home screen revenue as we kind of go through this softer macro patch. Thank you.
Sure Alright.
Maybe I'll tackle the first one and then hand it over to Mike.
To your point about growth, we really focus on it from a standpoint of engagement right. We're focused on bringing in more and more content that suits. What our viewers are looking for that as one of the places where our ACR data so valuable that informs us about what kind of content.
Our users are looking for one what they already consuming so that helps us as we bring new channels into watch free plus as we partner with additional.
Our partners on the platform and bringing bringing that answer just in continuing to feed that.
Desire for content is really important as we look at <unk>.
<unk> test hours per active account.
Was up 7% quarter year over year in the fourth quarter, which is which are really good but it's also shows that that's the third consecutive quarter of growth in hours per active account since we had to kind of lap against the big surgeons from the Covid dynamic. So we're we're encouraged that our viewers are understanding the value prop.
Bringing their understanding more and more about the content that's available theyre engaging in that content, obviously, the macro elements of cord cutting and certainly play right into our favor on this topic and as people begin to stream and have a good experience streaming there continues to be more and more and we're starting to see that really show up in our data and so everything we do from a user experience standpoint is to help.
And drive engagement increase the probability of someone spends a little more time ideally in AD supported content that we control the inventory and that helps us drive that monetization so more to come there, but we continue to focus on it across every corner of the company.
Okay.
Yeah, Hey, Steve.
I'll take the second.
Look I think from a <unk>.
Marketing partnership standpoint, we've got great relationships with all of the partnerships you mentioned right.
We're one of the largest distribution players in this space I think you just referenced.
We continue to drive an increase in significant time spent and engagement.
And we have a customer that has an affinity for AD supported content. So.
We have been and we will.
I expect to continue to be that and grow more the marketing partnerships. We have with these partners as they dive into kind of further into a model I think in general to its good really good for the space.
I mean these guys are in EMEA non marketplace I think we've talked about it in the past, but there.
There is still this huge gap between.
Time spent on smart Tvs.
<unk> spent streaming versus.
Linear dollars or $1 pumping in.
I think those those linear dollars as they shift into the connected TV space I think more of these players.
With with premium content will help drive more and more of that shift out of linear into into connected TV.
Uh huh.
Okay. Thank you.
Thanks, Steve Operator, we will take the next question.
Our next question comes from Wednesday, Mohan from Bank of America.
Your line is now open. Please go ahead.
Hi, Thanks for taking my questions, it's a rip loosening in Colombia today.
You had a good upfront commitments last year for the 2023 season or more than $200 million. So far have you seen any push outs or cancellations in those upfront commitments and then as you head into the current season.
2020 for upfront.
There'll be a greater percent of advertising dollars moving towards the upfront versus scatter market.
Our strategy changing any as you head into this year's upfront.
So let's start with the current upfront no we're still progressing well as.
As you mentioned, we closed over $200 million in upfront commitments last year.
We're very happy with the progression.
That we've had and I think what we're seeing is it helped us as we mentioned expand into a lot of new verticals or a lot of new categories.
So I mentioned before we grew CPG <unk> pharma all were up over 100% on the quarter year over year right. A lot of that is driven based on upfront commitments that we worked with some of those partners on.
In terms of our strategy for this year.
The date, yet, but we will be participating once again in the new fronts.
And in terms of in terms of our focus I think we are positioned exceptionally well to grow grow our upfront commitments. Once again. This year I think there will be more dollars supporting to import into the upfront for connected TV.
And I think with our distribution continuing to grow as one of the largest players in the space that they are over $17 million now with the time spent and engagement more impression opportunities as well as with all the core products, we have so what Sri plus.
Our first party data that.
That we have especially our viewing data as well as the home screen I think we're well positioned to capture capture the increase in dollars is this next year.
Okay. Thanks for the details there.
Can I ask a question on EBITDA I think your guidance for <unk> was slightly lower than the street and your thoughts on what are the main areas of spend for this year.
When you think about opex control versus the need to spend.
On your AD Tech platform is what allows.
The fact that you have some more competition on the TV space.
Any early thoughts on EBITDA it can be for the full year.
Year over year comparison to 2022 any thoughts on annual EBITDA. Thank you.
Yes, as you know, we don't guide to full year EBITDA at this time, but I can I can give you a little sense of kind of some of the factors to think about as the year will progress and.
I think also note that in the first quarter I think when you look at the guidance, which we do give around platform plus revenue platform plus gross profit dollars you see the margin coming down a little bit there part of that has to do with actually a step up on.
Some cloud.
The infrastructure that we needed to make an investment in to support the ongoing growth of the business I believe that we're going to scale against that step up in cost as the year progresses. So that will probably help ease the headwind of that a bit as the year progresses.
Other factors will be mix of advertising business on the platform plus side as we talked about video is going to outpace growth in the home screen that is a little bit different margin profile than homescreen as we've mentioned before so that's a consideration in it and then the question will be how aggressive are we going to be and we need to be on moving device smart Tvs in the mark.
Place, we know it's going to be competitive we're planning for it to be competitive but we're also.
So looking for efficiencies in the operations overall to help us fund that competitiveness, so lots and lots of puts and takes in there, but we'll see how the year progresses, and we're going to do what's fiscally smart for our business and obviously as I said before set us up for significant growth as the macro environment improves.
Thanks for all the detail.
Sure. Thanks, ruble operator, we will take our next question.
Our next question comes from Nicholas Wrangler of Stephens.
Your line is open. Please go ahead.
Hey, guys.
Wondering if you could talk about the potential to drive further engagement I'm watch free plus and maybe particularly in light of streaming services like HBO, Max making their broader library of content available to some fast channels out there I would imagine for those looking to grow distribution watch rupaul.
This is an ideal Jeff destination, but just your thoughts on and your ability to form new partnerships to grow our throughput.
Yes.
Yes.
Yes, thanks, Nick.
On the first side look from.
Watch free plus engagement standpoint, our home screen is the best tool we have available.
To drive viewership and lots of requests.
Not only.
<unk> grown our distribution.
And grown the time spent but.
It's the first thing you see when you turn your TV on right that's a hugely.
The valuable tool for us to drive promotion.
In Q4 alone we saw a 72% growth in search and discovery.
The holiday season, so so very impactful.
And we will continue to leverage that to promote the content offerings, we have available to our consumers on top of that we have the ability to leverage our viewing data right understanding what type of content household views in watches.
It allows us to source and promote specific types of content. They may want to watch within the watch free plus environment right.
Big advantage for us owning the platform.
And I would say a key part to us becoming the number two free AD supported.
<unk> on our platform.
In terms of your second question.
Round, how does that.
Look we've got great relationships.