Streaming device company added nearly 3 million new accounts, bringing Roku to 46 million overall
Roku’s stock price jumped higher on Thursday afternoon, after the streaming device maker and content aggregator posted an unexpected Q3 profit and sales that ran past Wall Street’s expectations.
For Q3, Roku reported revenue increased 73% year-over-year to $452 million, compared to analyst projections of $367.5 million. While Roku is best known for its streaming devices, advertising revenue continued to account for most of its sales, with $319.2 million coming from on-platform advertising.
The Los Gatos, California-based company’s gross profit also spiked 81% year-over-year to $215 million, translating to earnings of 9 cents per share — a surprise considering analysts expected Roku to lose 42 cents per share.
Roku added 2.9 million active accounts during the third quarter, reaching 46 million overall, as viewers continued to stay inside and watch content due to the COVID-19 pandemic.
As the ongoing COVID-19 pandemic continued to accelerate the shift of viewing away from traditional linear and pay TV, we continued to invest in competitive differentiation and execute well against our strategic plan,” Roku said in its letter to shareholders. “During the quarter, we achieved a 43% year-over-year active account growth rate and doubled the active account reach of The Roku Channel.”
Viewers watched 200 million more hours of content than they did last quarter, totaling 14.8 billion hours spent streaming on Roku in Q3. Per account, that comes out to 3.57 hours spent streaming each day. That’s a lot of streaming, but falls short of previous quarters, like Q1, when Roku accounts averaged 3.75 hours of streaming per day.
The company’s share price, soon after its report came out, jumped about 5% to $236 in early after-hours trading.
The Roku Channel, Roku’s linchpin ad-supported channel featuring movies and shows, reached 54 million Americans across both Roku and other streaming devices, the company said. Perhaps most notably during Q3, Roku struck a deal that brought Peacock, NBCU’s recently-launched streaming service, to the platform.
Heading into the quarter, Roku held 31% of the U.S. streaming device market, tied with Amazon Fire TV for the biggest cut of market share. Google, which recently revamped its Chromecast streaming device, is the next closest with 18% of the domestic market.
Roku will hold a call at 2:00 p.m. PST to discuss its third quarter performance.
More to come…
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