Shares of Roku soared in after-hours trading Wednesday after the company reported better-than-expected revenue for the third quarter.
Here’s how Roku performed for the quarter ending Sept. 30, compared to analysts’ estimates from LSEG, formerly known as Refinitiv:
- Loss per share: $2.33 vs. $2.12 expected
- Revenue: $912 million vs. $855.2 million expected
Roku reported a net loss of $330.1 million for the third quarter, or $2.33 per share, nearly triple the loss of $122.2 million, or 88 cents per share, which is what the company reported in the year-ago quarter.
But revenue was up 20% year over year, the company reported, largely driven by “strong performance in content distribution and video advertising, along with unit sales of Roku-branded TVs, which launched in March 2023,” Roku said in a shareholder letter.
Roku-branded smart TV’s come pre-installed with the Roku interface users would experience on an external plug-in Roku Streaming Player. The smart TVs were first made available at Best Buy earlier this year and drove a device segment revenue increase of 33% from the year-ago quarter, the company said during its earnings call Wednesday.
“Branded TVs also drove a higher portion of net adds in active accounts than the streaming players in international markets,” Roku Devices President Mustafa Ozgen said during Wednesday’s earnings call.
The company said it fared better during the quarter with advertisements, weathering an industry-wide ad slowdown.
“We had a solid rebound in video ads in the third quarter,” Roku Media President Charlie Collier said during the earnings call. “We expect year-over-year growth in the fourth quarter to be similar, but we remain cautious about the ad market recovery going forward.”
Active accounts also beat the Street’s estimates, coming in at 75.8 million for the quarter, compared to StreetAccount estimates of 75.33 million. That’s a net increase of 2.3 million active accounts from the previous quarter.
For the fourth quarter, Roku expects revenue of roughly $955 million, topping the $952 million expected by Wall Street, according to LSEG.
In September, Roku said it was laying off 200 employees in a bid to reduce the company’s year-over-year operating expense growth rate. The move followed rounds of layoffs earlier this year in March and November 2022. The company also committed to various cost-cutting measures including consolidating office space and slowing hiring, CNBC reported at the time.
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