Walmart's advertising business delivered its strongest annual performance on record in the fiscal fourth quarter ended January 31, 2026, with the company reporting $6.4 billion in total global advertising revenue for fiscal year 2026 - a 46% increase that positions the retail giant as a serious challenger in the commerce media landscape. The results, released on February 19, 2026, show Walmart Connect growing 41% in the fourth quarter in the United States, excluding VIZIO contributions, what CFO John David Rainey described on the earnings call as "the best year over year number we've had for any quarter that I can remember in probably the last three years."

The quarterly advertising figure - global advertising was up 37% including VIZIO in Q4 - caps a fiscal year in which Walmart systematically expanded its retail media infrastructure across three distinct channels: onsite search and display advertising, in-store digital screens, and connected television via the VIZIO acquisition. For suppliers and agencies managing budgets across competing retail media networks, the pace of acceleration raises a practical question about where Walmart stands relative to Amazon's far larger advertising machine.

VIZIO delivers triple-digit growth

The VIZIO segment, acquired by Walmart in fiscal year 2026, delivered triple-digit growth in advertising revenue during the fourth quarter, according to Rainey in the buy-side earnings call transcript. That performance came on a relatively small base but signals that Walmart's connected television ambitions are moving beyond the integration phase into genuine commercial traction.

According to the earnings release, the global advertising business is recorded either as net sales or as a reduction to cost of sales, depending on the nature of the advertising arrangement - a technical accounting distinction that means the $6.4 billion figure reflects operational advertising activity rather than a single revenue line. VIZIO's contribution is treated separately from Walmart Connect's U.S. supply-side advertising, allowing investors and analysts to assess the organic platform growth alongside the acquired TV inventory layer.

The strategic logic of the VIZIO acquisition was articulated during the buy-side call. Rainey noted that VIZIO enables non-endemic advertising - meaning Walmart can now sell inventory to brands whose products are not sold on Walmart.com. "I think on a previous call, maybe I used the example of a Ford F150," he said, pointing to the category expansion this unlocks beyond the traditional retail media model of brands paying for placement against their own SKUs.

Retail media and CTV have been converging through 2025, a trend IAB Europe documented in November 2025 analysis showing retail networks positioning themselves as infrastructure powering all media formats rather than functioning as single channels.

Walmart Connect's position within the retail media hierarchy

Despite the 41% growth rate, Rainey acknowledged that Walmart Connect's advertising revenue as a percentage of gross merchandise value remains "mid to even low single digits" - characterizing it as "middle of the pack" relative to competitors. That framing implies substantial runway for monetization growth relative to the underlying commerce volume flowing through Walmart's platforms. The company processed $190.7 billion in total revenues in Q4 FY26 alone, up 5.6% year-over-year, and $713.2 billion across the full fiscal year.

The arithmetic matters for the advertising industry. Amazon's advertising services segment generated roughly $56 billion in 2024 as a proportion of its vastly larger GMV base. Walmart's $6.4 billion represents a fraction of that figure but is growing at a faster rate, particularly in the U.S. onsite segment that excludes the VIZIO acquisition.

Walmart Connect's AI-powered advertising tools, announced January 6, 2026, add another dimension to the competitive picture. The platform introduced a conversational advertising assistant to help brands build, optimize, and troubleshoot Sponsored Search campaigns - a capability responding to structural pressure from AI shopping agents that could alter how brands reach consumers. The U.S. retail media sector reached $52.44 billion in 2024, according to figures cited in that context.

General merchandise categories drive disproportionate advertising returns. Rainey was specific about this dynamic: "You're going to get more advertising dollars advertising for a pair of tennis shoes than you are for a head of broccoli." As Walmart expands its marketplace with more third-party general merchandise sellers, the addressable advertising inventory expands accordingly. Marketplace grew roughly 20% in the U.S. in the fourth quarter, adding both GMV and advertising opportunity simultaneously.

eCommerce acceleration fuels ad platform growth

The advertising business does not operate in isolation. Walmart U.S. eCommerce grew 27% in Q4 FY26, the eighth consecutive quarter above 20% growth for the segment. eCommerce now accounts for approximately 23% of overall sales mix at Walmart globally. That digital footprint - 280 million customers visiting more than 10,900 stores and numerous eCommerce websites each week - gives Walmart Connect an audience scale that few retail media networks can match.

Store-fulfilled expedited delivery grew more than 50% in the quarter, according to the earnings release. That operational speed creates the physical infrastructure enabling Sparky, Walmart's AI shopping assistant, to promise delivery in under 30 minutes in many markets. The connection to advertising is direct: when Sparky builds bigger baskets and drives 35% higher average order values among users who engage with the agent, each incremental item in that basket represents potential advertising inventory.

According to CEO John Furner's remarks on the February 19 earnings call, "We had a really good quarter in advertising, up 37% around the world, while Walmart Connect in the United States was up 41%, which is a very strong quarter." He acknowledged the complexity of how agentic commerce intersects with advertising monetization: "How this will work with agentic commerce, I think we're all learning as we go."

Walmart and Google activated direct purchasing through Google Gemini and AI Mode in Search on January 11, 2026, using the Universal Commerce Protocol. That integration places Walmart inventory inside conversational AI interfaces, potentially shifting how discovery and purchase happen - with implications for how advertising spend flows through the ecosystem.

Sparky's role in advertising economics

Walmart U.S. President David Guggina provided additional data on Sparky's performance during the Q4 earnings call: roughly half of Walmart's app users have engaged with the agent, and those who do show an average order value approximately 35% higher than non-Sparky customers. "Sparky is essentially helping us evolve from traditional search to intent-driven commerce," Guggina said, noting that better discovery translates into bigger baskets and greater purchase frequency.

The advertising implications are significant. Sparky builds baskets rather than facilitating individual product searches, which means the advertising surface - where Sponsored Products appear within search results - could evolve toward a model where placement decisions are made by an AI agent interpreting shopper intent rather than a keyword auction. Rainey addressed this directly in the buy-side call: "If you have a more contextual, personalized experience, the ROAS on that advertising spend could be even higher."

The company tested advertising formats within Sparky during fall 2025, exploring how sponsored products and recommendations can integrate naturally into AI-guided shopping sessions rather than treating agentic commerce as an inherent threat to monetization. That posture - viewing contextual AI as potentially improving return on ad spend - distinguishes Walmart's public position from the more defensive framing adopted by some publishers facing similar questions.

Sam's Club and international advertising

Sam's Club U.S. posted 23% eCommerce growth in Q4 FY26, with digital tools including Scan & Go and club-fulfilled delivery continuing to gain member adoption. Membership grew to record highs during the quarter. The warehouse club format generates advertising revenue through its own distinct platform, separate from Walmart Connect's supplier-facing U.S. operation.

Walmart International's advertising business grew 10% in Q4, with the full fiscal year showing 19% growth internationally. The comparative moderation against U.S. domestic growth reflects different market maturity levels and the absence of a VIZIO-equivalent connected TV acquisition in international markets. China, Walmex, and Flipkart led the international top-line results, with China delivering particularly strong operating income growth.

Flipkart's Big Billion Days shopping event timing shifted between quarters - nine days in Q3 and two days in Q4 of fiscal year 2026, compared to five days in Q3 and six days in Q4 of fiscal year 2025 - creating a growth headwind for international advertising in Q4 that was offset in the prior quarter. This structural factor makes year-over-year comparison more nuanced for Walmart's international advertising segment.

Broader financial context

Total Q4 revenues reached $190.7 billion, up 5.6% or 4.9% in constant currency. Operating income grew 10.8% to $8.7 billion, outpacing sales growth - which Walmart has now achieved for three consecutive fiscal years. Adjusted EPS of $0.74 excluded a $0.21 per share net loss on equity and other investments. GAAP EPS of $0.53 reflected those investment valuation impacts.

For full fiscal year 2026, net sales reached $706.4 billion, with membership and other income of $6.75 billion bringing total revenues to $713.2 billion. Global membership fee revenue grew 15.1% in Q4, strengthened particularly by Sam's Club China membership growth within Walmart International. Free cash flow reached $14.9 billion for the year, supporting the company's $30 billion new share repurchase authorization announced alongside the earnings.

The company issued guidance for fiscal year 2027 with net sales expected to grow 3.5% to 4.5% in constant currency, and adjusted operating income expected to grow 6.0% to 8.0%. Adjusted EPS guidance stands at $2.75 to $2.85. Capital expenditures are planned at approximately 3.5% of net sales.

What this means for the advertising industry

The retail media competitive landscape is reshaping faster than most forecasts anticipated. Commerce media revenues rose 23% to $53.7 billion in 2024, with retail media projected to capture 20% of global advertising revenue by 2030. Walmart's Q4 results reinforce that trajectory.

For brands and agencies, the 41% growth in Walmart Connect is both an opportunity signal and a negotiating data point. Brands working with four to six retail media networks doubled from 10% to 24% in 2025, indicating that advertisers are actively diversifying their retail media portfolios beyond Amazon. Walmart Connect's acceleration - particularly in the general merchandise and marketplace categories where it competes most directly with Amazon's sponsored products - gives brands a credible alternative at scale.

The Trade Desk's integration with Koddi for programmatic onsite retail media buying, announced in October 2025, represents the infrastructure direction that benefits networks with strong first-party data. Walmart Connect, with access to transaction data from 280 million weekly shoppers, holds a significant data asset. The question is whether programmatic access to that inventory expands through third-party platforms or remains primarily direct.

LiveRamp's measurement capabilities for retail media networks analyzing Meta campaign performance, announced in October 2025, addressed the off-site measurement challenge. Whether Walmart Connect integrates with such cross-platform measurement infrastructure - or builds proprietary attribution - affects the platform's attractiveness to brands seeking unified performance measurement across channels.

The combination of VIZIO's connected television inventory, Sparky's AI-driven commerce, 170,000 in-store digital screens across more than 4,500 locations, and a fast-growing marketplace creates an omnichannel advertising stack that differs structurally from most competitors. For advertisers, the Q4 results suggest that ignoring Walmart Connect carries meaningful opportunity cost - particularly for brands in general merchandise, seasonal, and apparel categories where the platform's growth trajectory is most pronounced.

Timeline

Summary

Who: Walmart Inc. (Nasdaq: WMT), headquartered in Bentonville, Arkansas, led by President and CEO John Furner and CFO John David Rainey. Results affect brand advertisers, agencies, competing retail media networks including Amazon Advertising and Target's Roundel, and the broader programmatic advertising ecosystem.

What: Walmart reported Q4 fiscal year 2026 earnings on February 19, 2026, revealing its global advertising business grew 37% in the quarter to reach nearly $6.4 billion for the full fiscal year - a 46% annual increase. Walmart Connect, the company's U.S. retail media platform, grew 41% excluding VIZIO, while VIZIO's connected television advertising delivered triple-digit growth. The full quarter saw total revenues of $190.7 billion, up 5.6%, with operating income growing 10.8%, outpacing sales. Global eCommerce grew 24%, with Walmart U.S. eCommerce up 27%.

When: Fourth quarter of fiscal year 2026, covering the 13-week period ended January 31, 2026. The earnings release and investor call took place on February 19, 2026.

Where: Walmart operates more than 10,900 stores across 19 countries and serves approximately 280 million customers and members each week. Walmart Connect's advertising platform operates across Walmart.com, the Walmart App, and 170,000 digital screens in more than 4,500 U.S. stores, alongside VIZIO's connected television inventory.

Why: The advertising results matter because retail media has emerged as Walmart's highest-margin, fastest-growing revenue stream, diversifying the company's profit sources beyond traditional merchandise sales. The 41% growth in Walmart Connect - supported by marketplace expansion, general merchandise category strength, and Sparky's AI-driven commerce improving basket size and conversion - reflects a structural shift in how consumer goods brands allocate digital advertising budgets toward first-party data environments as privacy regulations constrain traditional targeting. VIZIO's non-endemic advertising capability opens inventory to brands that do not sell products on Walmart platforms, significantly expanding the addressable advertiser base.

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