Roku Shares Crash Even Though Earnings and Revenue Topped Expectations

Shares of streaming device maker Roku were falling 12% despite reporting a third quarter financial report that beat on both the top and bottom lines.

For the quarter, Roku reported a loss per share of 9 cents. Analysts were waiting for a loss of 12 cents. Revenue at $173.4 million was also ahead of the $169.1 million that was expected. The company reported 23.8 million active accounts versus the 23.1 million expected.

Shares falling may have been attributed to platform segment revenue falling behind expectations and the fact that the company isn’t making as much as money as expected. Average revenue per user was expected to be $17.44 while Roku reported $17.34.

Looking ahead the company has guided for revenue in the range of $722 million to $732 million for the full year. This is an increase from the previous outlook of $710 million to $730 million. Wall Street was waiting for $722.8 million.

The company said it was “thrilled with the results.”

CEO Anthony Wood said on the call, “We had an outstanding quarter and I believe that we are on-track to reach or exceed $500 million in revenue this year, a big milestone for Roku. We are more excited than ever about our streaming platform, our competitive position in the industry, and a massive shift of the TV ecosystem to streaming.”

He added, “Almost 90% of our gross profit comes from our advertising, audience development, and content distribution services in our platform segment. This segment is driving our strong gross profit and revenue growth.”

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