Roku Shares Drop As Company Misses on Revenue in Q3

Streaming platform device maker Roku reported its third quarter financial results on Wednesday that didn’t impress Wall Street.

The company saw its shares plunge in after-hours trading after it reported a revenue miss and a weak outlook for the fourth quarter.

For the third quarter, revenue came in at $680 million, just below a Refinitiv forecast of $683.4 million. This was still a growth of 51% from a year earlier.

Roku’s earnings per share of 48 cents were better than expectations for earnings of 6 cents.

Active accounts on the platform rose 23% year over year to 56.4 million representing an increase of 1.3 million active accounts from the second quarter.

According to Firsthand Capital Management CEO Kevin Landis, Roku is ‘still a good story,’ despite the drop in share price.

In its shareholder letter, Roku said the deceleration is a result of “global supply chain disruptions that have impacted the U.S. TV market.”

Player revenue, which includes the company’s streaming devices, fell 26% year over year in the third quarter to $97.4 million.

Platform revenue jumped 82% to $582.5 million while streaming hours in the quarter rose 21% from a year ago to 18 billion, with active accounts averaging 3.5 streaming hours a day.

Looking ahead, the company expects those disruptions to continue into 2022 and impact product pricing, availability, and advertising during the holiday season.

TV sales in the quarter also fell below pre-pandemic levels in 2019 for the company. Roku also said original equipment manufacturers suffered from inventory constraints.

“The pandemic continues to disrupt global supply chains,” CFO Steve Louden told CNBC, in an interview after the report. “For the TV industry, you’re having elevated component pricing, inventory availability issues, and supply chain logistics delays.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.