Roku reports revenue boost in Q3, climbing to $912 million

Streaming platform and smart TV manufacturer operator Roku deliver solid results during the third quarter, with  revenue climbing up to $912 million, up by 20% year over year.

Roku’s revenue boost is well ahead of expected Wall Street’s analysts of  $853.2 million revenue, however net loss was higher than Wall Street’s analysts prediction of $2.08 per share, with a net loss of $2.33 per share.

Platform revenue increased by 18%. year over year reaching $787 million. Though platform gross margin was 48%, down five percentage points QoQ, driven primarily by a $62 million restructuring charge related to the removal of select licensed and produced content from The Roku Channel, according to the provider.

Roku also reported during Q3, The Roku Channel hit 26.7 billion, up 4.9 billion hours YoY. The channel expanded it offering in the third quarter to include FIFA+, CBS Sports HQ, local news FAST channels from FOX and CBS, FAST channels from NBCUniversal as well as MrBeast6000, from YouTube star MrBeast. According to a Nielsen report The Roku Channel remains a top-10 TV streaming app and represented nearly 3% of all TV streaming in September, comparable to the engagement that Paramount+, Peacock, and Max each receive across all streaming distribuion platforms.

The company saw growth across its active accounts reaching 75.8 million, it sees a net increase of 2.3 million active accounts from Q2 2023. Though Average Revenue Per User (ARPU) was $41.03 down 7% YoY.

Roku hit $369 million for Gross profit, up 3% YoY, with adjusted EBITDA rising to $43 million during the third quarter.

In a shareholders letter, Roku said: “We had a solid rebound in video ads in Q3 and we expect the YoY growth rate of video ads in Q4 to be similar. However, we remain cautious amid an uncertain macro environment and an uneven ad market recovery. Additionally, we will face difficult YoY growth rate comparisons in content distribution and M&E which will challenge the YoY growth rate of platform revenue in Q4. That said, we have significant scale and engagement, and we expect to grow ad share. We will continue to operate our business with discipline to defend margins, with a focus on driving positive free cash flow over time. While we have made the difficult decision to reduce headcount, we will invest in high ROI initiatives to maintain our competitive position. For Q4, we expect total net revenue of roughly $955 million, total gross profit of roughly $405 million, and Adjusted EBITDA of $10 million. And, as we indicated earlier, we remain committed to positive Adjusted EBITDA for full year 2024, with continued improvements after that. ”