Roku Resilience Shines: Roku’s performance in the third quarter drew significant attention in after-hours trading, as the company surpassed revenue expectations.
In the quarter ending September 30, Roku’s financial results outperformed analysts’ estimates from LSEG (formerly known as Refinitiv) in several key aspects:
- Loss per share: $2.33, surpassing the expected $2.12
- Revenue: $912 million, exceeding the anticipated $855.2 million
Despite reporting a net loss of $330.1 million, or $2.33 per share for the third quarter, nearly tripling the loss from the year-ago quarter, Roku’s revenue exhibited substantial growth, climbing 20% year over year. The company attributed this growth to robust performance in content distribution, video advertising, and unit sales of Roku-branded TVs, which were introduced in March 2023.
Roku-branded smart TVs come equipped with the familiar Roku interface that users experience on external plug-in Roku Streaming Players. Their availability at Best Buy earlier this year significantly contributed to a 33% increase in device segment revenue compared to the year-ago quarter, as announced during the earnings call.
Mustafa Ozgen, President of Roku Devices, noted that the branded TVs played a pivotal role in expanding the number of active accounts, particularly in international markets, outperforming the streaming players.
The company also demonstrated resilience in the advertising sector, weathering a broader industry slowdown. Roku experienced a notable rebound in video ads during the third quarter, with Charlie Collier, President of Roku Media, expressing optimism about year-over-year growth in the fourth quarter, albeit with some caution about the ad market’s future recovery.
Roku’s active accounts exceeded Street expectations, totaling 75.8 million for the quarter, compared to StreetAccount’s estimate of 75.33 million. This represented a net increase of 2.3 million active accounts from the previous quarter.
For the fourth quarter, Roku anticipates revenue of approximately $955 million, surpassing the $952 million forecasted by Wall Street, according to LSEG.
In September, Roku implemented cost-cutting measures, including laying off 200 employees, to manage its year-over-year operating expenses. These actions followed earlier rounds of layoffs in March and November 2022 and included efforts to streamline office space and hiring processes.
Roku’s performance in the third quarter reflects its ability to navigate a challenging landscape and deliver better-than-expected results, setting the stage for a promising fourth quarter and beyond.
Also read: Disney Strategic Hulu Acquisition Reshapes the Streaming Landscape”
Our Reader’s Queries
Where does Roku get its signal?
For seamless streaming, an internet connection is a must-have for all Roku devices. While some models offer the option of a hard-wired connection via an Ethernet cable, Wi-Fi connectivity is available across the board. Once you’ve completed the setup process, which includes creating a free Roku account, you’re good to go and can start enjoying your device immediately.
Is the secret on Roku?
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Is there a subscription for Roku TV?
Creating a Roku account is absolutely free and there are no monthly charges for equipment rental, which makes streaming and saving a breeze. By adding a payment method, you can effortlessly rent or purchase movies on demand or subscribe to popular services such as Netflix.
How does Roku make money?
The Roku Channel is accessible for viewers in the US, Canada, and the UK, and boasts a diverse range of advertisers from both local and international brands. By running ads during the free TV shows and movies it streams, The Roku Channel generates advertising revenue.