More Streaming Helps Roku Beat Second-Quarter Targets

Streaming device maker Roku reported its second quarter financial results this week and beat Wall Street’s targets as a surge in streaming usage occurred during the coronavirus pandemic.

The San Jose, Calif.-based company reported a loss of 35 cents a share on sales of $356.1 million in the June quarter. Analysts were expecting Roku to lose 50 cents a share on sales of $315 million. In the year-earlier period, Roku lost 8 cents a share on sales of $250.1 million.

During the quarter Roku added 3.2 million active accounts to reach 43 million. On a year-over-year basis, the number of active Roku accounts is up 41%.

Average revenue per user climbed to $24.92, up 18% from the same quarter last year.

CEO Anthony Wood said on the earnings call, “Streaming is the most powerful force shaping television today. It is unleashing innovation and bringing greater choice, value and control to consumers. We are also seeing that the ongoing COVID-19 pandemic is accelerating the macro trends that will define the streaming decade. For example, consumers are streaming more and they are turning to services that offer good value. Also more and more content owners are adopting a growth marketing mindset and partnering with platforms like Roku to acquire, engage and retain valuable audiences. And brands are reevaluating where their ads needs to appear in order to reach consumers, while looking for ways to increase the effectiveness of their campaigns.”

He added, “Against this backdrop Roku delivered strong results and exceptional account growth in the second quarter. We are increasing platform scale and extending our competitive advantages while helping content owners, advertisers, retailers and TV OEMs capitalize on the shift to streaming. The strong relative performance of our ad business also stood out during the quarter. It grew as the overall TV ad market declined. Of course, the outlook for the ad industry remains highly uncertain for the balance of this year and we believe it will be well into 2021 before TV ad investment recovers to pre-pandemic levels. Despite these headwinds, we believe we are very well positioned to increase share in the very large TV ad marketplace over time.”

Roku now operates in more than 20 countries, including Brazil, Canada, Mexico and the United Kingdom.
There was no guidance offered for the second half of the year, citing economic uncertainties related to the coronavirus pandemic.

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