Roku Matches Wall Street Forecasts For Quarterly Losses, Beats Revenue Expectations; Advertising Challenges To Continue In Q2
Roku delivered first-quarter results with some bright spots, including better-than-expected revenue, but the streaming provider said it sees its advertising business remaining challenged.
Revenue reached $741 million, up just 1% from the year-ago quarter, while losses widened to $1.38 per share from 19 cents in the 2022 period. Wall Street analysts had expected a loss of $1.37 and revenue of $708.5 million.
The company said it reached 71.6 million active accounts on connected devices and smart TVs, a year-over-year gain of 17%.
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Advertising remains under significant challenge, but Roku said in its quarterly letter to shareholders that it is looking to leverage its broad scale as a way to improve engagement. After adding sports as an “experience” accessed via the home screen, Roku said it hosted more streaming of February’s Super Bowl than any other platform. The company said 12% of viewers got to the game through either through the sports experience or a game-related ad.
Roku shares have rallied more than 40% in 2023 to date, but they dropped 2% to close the regular trading day at $56.56 before rebounding after hours on the earnings news.
Average revenue per user, a key metric in streaming, fell 5% compared with the year-ago period, settling at $40.67. Globally, users streamed 25.1 billion hours in the quarter, or a record 3.9 streaming hours per active account each day.
The company said inflation and worries about a looming recession will constrain the business in the second quarter as they did in the first. Some ad categories, among them travel and health and wellness, are expected to improve, while financial services and media & entertainment remain under pressure. Losses will continue in the second quarter, Roku said, but revenue will post sequential improvement to $770 million.
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