Coming off its IPO last fall, Roku’s latest round of financial results offered a mixed bag. The streaming firm’s fourth-quarter results beat analyst estimates, but forecasts for the current quarter drew concerns from investors.
Roku shares were taking a 16% haircut on Thursday (Feb. 22), the day after the streaming and advanced ad specialist said Q1 sales would be in the range of $120 million to $130, off from expectations of $132 million. The worry is that Roku will be challenged to sustain the growth of its overall business.
But Roku’s Q4 results were better than expected, as revenues climbed 28% to $188.3 million, led by its fast-growing Platforms unit (up 129% year-over-year) that factors in advertising, subscription revenue sharing and the licensing fees from TV makers that integrate Roku’s platform.
Sales of Roku player units rose 25% for the year, but Q4 player revenues dipped 7%, to $102.82 million.
Roku stressed again that the primary focus of its player business is to boost active accounts rather than maximizing hardware revenues and hardware gross profit.
The latter example clearly played out amid lower suggested retail pricing and pricing promos, as well as a focus by consumers on lower-end models such as the Roku Express. Roku’s player business also faces heated competition from rivals such as Apple (Apple TV), Google (Android TV and Chromecast) and Amazon (Fire TV).
But the player business also drove the right result with respect to active accounts. Roku ended 2017 with 19.3 million of those, adding 5.9 million in Q4 alone.
Streaming hours also rose 55%, to 4.3 billion, and average revenue per user jumped 48%, to $13.78. The company also touted progress on The Roku Channel, a curated, free, ad-based offering that launched last fall.
Scott Rosenberg, GM of Roku’s Platforms business, said The Roku Channel has exceeded expectations and is already a “material contributor” to the video inventory it sells.
Coming off its IPO last fall, Roku’s latest round of financial results offered a mixed bag. The streaming firm’s fourth-quarter results beat analyst estimates, but forecasts for the current quarter drew concerns from investors.Subscribe for full article
Get Access to Our Exclusive Content
Already subscribed?Log In