Roku Shares Just Fell Despite Earnings Beat

Streaming device maker Roku saw its shares drop on Tuesday in after-hours trading after the company reported third quarter financial results.

Shares fell over 14% despite the company reporting average revenue per user of $22.58, compared with the previous quarter’s metric of $21.06.

The company also reported an adjusted loss of 22 cents while analysts surveyed by Refinitiv expected a loss of 28 cents. Revenue was $261 million compared to $256.9 million expected per Refinitiv consensus estimates.

For the quarter, Roku reported 32.3 million active accounts, up from 30.5 million during the previous quarter, and an average revenue per user of $22.58 compared to the previous quarter’s metric of $21.06.

Looking ahead, the company raised guidance and now expects to bring in $1.11 billion in revenue, at the midpoint of a projected range, for the full year of 2019. This is in line with analyst expectations.

Roku also expects its recent acquisition of Dataxu to drive revenue growth throughout Q4. The company bought ad tech company Dataxu in October for $150 million. Dataxu allows marketers to plan and buy video ad campaigns.

CEO Anthony Wood stated, “We reached one in 5 U.S. households, and our domestic scale rivals the biggest MVPDs. The second is that ARPU was about $20 on a trailing 12-month basis. ARPU has expanded 88% in the two years since we went public.”

“Achievements like these show our strategy is working and our execution is strong. Q2 financial results also exceeded our expectations. We had the highest Q2 growth rate since going public and we are raising our outlook for the full year. Strong performance allows us to continue to reinvest incremental gross profit in ways that extend our strategic advantages and build even greater preference for Roku among consumers, content publishers, OEMs, and advertisers.”

Disclaimer: We have no position in Roku Inc. (NASDAQ: ROKU) and have not been compensated for this article.