What happened

Shares of smart TV company Vizio (VZIO 0.18%) soared on Wednesday. As of 10:35 a.m. EST the stock was up 18.4%.

The tech stock's gain came after the company reported better-than-expected third-quarter results, featuring soaring platform net revenue growth.

Someone pointing a remote at a giant TV.

Image source: Getty Images.

So what

Vizio is seeing robust growth thanks to previous investments in its platform business that competes with Roku (ROKU 1.83%). Vizio's total revenue increased from $582.2 million in the year-ago quarter to $588.3 million. But its platform revenue climbed 134% year over year to $85.9 million. This was notably faster growth than Roku's 82% increase in platform revenue over the same period. Further highlighting the momentum in Vizio's platform business, active accounts on its SmartCast operating system grew 35% year over year to 14.4 million -- also faster than Roku's 23% growth in active accounts over the same period. Of course, Roku is building on a bigger base; its total active accounts by the end of Q3 were 56.4 million. 

Capturing a difficult year-ago comparison when many people were buying TVs as they quarantined at home, Vizio's Smart TV shipments were down 36% year over year. But they were up 27% sequentially -- and management expects further sequential growth in the fourth quarter. 

"Because VIZIO delivers the entire entertainment experience -- from the hardware and software, to the content and ads -- we are able to deliver an attractive value proposition to consumers, advertisers, and content partners alike," said Vizio CEO William Wang.

Now what

Vizio expects its platform revenue to jump sharply in the holiday quarter, coming in between $100 million and $110 million. The midpoint of this guidance range represents 22% sequential growth.