Roku Shares Blast Off After Company Says This

Shares of streaming device maker Roku were soaring on Monday after the company said it expects streaming hours to grow 49% in the first quarter.

Roku announced on Monday that it would be withdrawing its full-year 2020 financial outlook due to economic uncertainties around the Covid-19 pandemic but for the first quarter, it expects revenue to be slightly higher than stated in its previous outlook.

Roku now estimates 39.8 million active accounts as of March 31, 2020, with a net increase of 3 million since December 31st. The company also expects its first-quarter streaming hours to be 13.2 billion, representing a 49% increase year-over-year.

Roku said it estimates total net revenue to be between $307 and $317 million for the first quarter. The previous outlook that was expected was $305 million as the midpoint of total revenues.

“As previously noted, the roll out of this feature will moderate streaming hour growth; however, beginning in late Q1 Roku started to see the effects of large numbers of people ‘sheltering at home,’” the company stated.

“For Roku, this has resulted in an acceleration in new account growth and an increase in viewing.”

CEO Anthony Wood said consumers are turning to the platform “now more than ever.” He added, “We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing,” Wood said. “While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.”

Shares were up over 9% in after-hours trading on Monday as Wall Street digested the news.

Roku will release first-quarter 2020 results on May 7th after the market closes.

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