Roku stock climbs 18% on higher third-quarter revenue and strong outlook
A video board displays the logo of Roku, a video streaming company, in Times Square after the company’s IPO on the Nasdaq market in New York on September 28, 2017.
Brendan McDermid | Reuters
Actions of Roku soared in premarket trading Thursday after the company reported better-than-expected third-quarter revenue.
Here’s how Roku performed for the quarter ending September 30, compared to estimates from analysts at LSEG, formerly known as Refinitiv:
- Loss per share: $2.33 versus $2.12 expected
- Income: $912 million versus $855.2 million expected
After the bell Wednesday, Roku reported a third-quarter net loss of $330.1 million, or $2.33 per share, nearly triple the loss of $122.2 million, or 88 cents per share. stock, which the company reported during last year’s quarter.
But revenue grew 20% year over year, the company reported, largely driven by “strong performance in content distribution and video advertising, as well as TV unit sales Roku brand, launching in March 2023. said in a letter to shareholders.
Roku-branded smart TVs come pre-installed with the Roku interface that users would experience on an external Roku Streaming Player plug-in. Smart TVs were the first available at Best Buy earlier this year and led to an increase in device segment revenue of 33% compared to last year’s quarter, the company announced during its earnings conference call Wednesday.
“Branded TVs also generated a higher share of net adds in active accounts than streaming players in international markets,” Roku Devices President Mustafa Ozgen said during the company’s earnings conference call. Wednesday.
The company said it performed better in the quarter from ads, overcoming an industry-wide crisis. slowdown of ads.
“We had a strong rebound in video ads in the third quarter,” Roku Media President Charlie Collier said during the earnings conference call. “We expect year-over-year growth in the fourth quarter to be similar, but we remain cautious about the future recovery of the advertising market.”
Active accounts also beat Street estimates, coming in at 75.8 million for the quarter, compared to StreetAccount’s 75.33 million. This represents a net increase of 2.3 million active accounts compared to the previous quarter.
For the fourth quarter, Roku expects revenue of about $955 million, surpassing the $952 million Wall Street expected, according to LSEG.
In September, Roku announced the layoff of 200 employees with the aim of reducing the growth rate of the company’s operating expenses year over year. The move follows rounds of layoffs earlier this year, in March and November 2022. The company has also committed to various cost-cutting measures, including consolidating office space and slowing hiring. CNBC reported at the time.
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