Roku beats expectations with strong sales growth

Streaming device and FAST company Roku saw its share price jump after it posted Q2 results that beat market expectations.

Active accounts were up 16% year-on-year to 73.5 million. Revenue was up 11% to US$847.2 million, with platform revenues and device sales both rising significantly.

The company posted an adjusted EBITDA loss of US$17.8 million, down 47% year-on-year but an improvement on the preceding three quarters.

In terms of those active accounts, sequential net adds of 1.9 million were slightly above net adds a year ago, driven primarily by the Roku TV licensing programme in the US and international markets. The company pointed to continuing dramatic declines in US cable households with TV packages as a driving contributor.

The company said its focus on smart TV was paying off, given resilient sales in this sector. It cited figures from Circana to show that in Q2, the Roku opera>ng system was the number one selling TV OS in the US and that year to date its TV unit share was larger than the next three largest TV operating systems combined. Roku launched its own branded TVs in March.

Platform revenue was US$744 million in Q2, up 11% year-on-year. Platform revenue primarily comes from the sale of digital advertising including media and entertainment promotional spending, the demand-side platform, and related services, as well as content distribution services such as subscription and transaction revenue shares, and the sale of premium subscriptions.

ARPU was US$40.67, down 7% year-on-year, which the company said was due to strong global active account growth outpacing platform revenue growth.

Roku cautioned that macroeconomic trends remained uncertain, and forecast net revenue of about US$815 million for Q3 and an adjusted EBITDA loss of US$50 million.