Roku Reports Strong Q3 Earnings with Significant Revenue Growth

Roku Inc (NASDAQ: ROKU) announced its third-quarter financial results after the market closed on Wednesday.

Key Highlights:

In the third quarter, Roku achieved a revenue of $1.06 billion, reflecting a 16% increase compared to the same period last year. This figure surpassed the Wall Street consensus estimate of $1.02 billion, as reported by analysis from Benzinga Pro.

This quarter was notable for Roku as it marked the company's first instance of surpassing $1 billion in total revenue.

The revenue breakdown indicated that platform revenue reached $908.2 million, up 15% year-over-year. Additionally, revenue derived from devices was reported at $154 million, showing a 23% increase year-over-year.

Roku recorded a loss of 6 cents per share during this quarter, which was better than analysts' expectations of a loss of 32 cents per share.

This quarter also highlighted Roku's fifth consecutive quarter of positive adjusted EBITDA and free cash flow performance.

The number of streaming households grew to 85.5 million, an increase of 2 million from the previous quarter. Streaming hours reached a total of 32 billion, marking an increase of 5.3 billion hours from the same quarter last year. Roku's average revenue per user stood at $41.10, remaining consistent year-over-year, while average streaming hours per household per day rose to 4.1 hours, compared to 3.9 hours in the third quarter of the previous year.

Roku continued to excel in the television market with its operating system being recognized as the leading TV operating system in the United States, Mexico, and Canada.

The Roku Channel also performed impressively, ranking as the third most popular app on the platform in terms of reach and engagement, and it saw an impressive 80% increase in streaming hours year-over-year.

Looking Ahead:

Roku aims to expand its number of streaming households in existing markets, setting a milestone goal of reaching 100 million streaming households, which it expects to accomplish within the next 12 to 18 months.

The company has provided guidance for its fourth-quarter revenue, forecasting $1.14 billion, representing an expected 16% increase year-over-year. Additionally, platform revenue is anticipated to grow by 16% year-over-year, while devices revenue is projected to increase by 25% year-over-year in the upcoming quarter.

For the fourth quarter, adjusted EBITDA is expected to be around $30 million. Roku also noted a strong increase in political advertising spending, which is likely to continue into the fourth quarter.

Stock Performance:

Following the announcement, Roku's stock fell by 7.4%, trading at $71.75 in after-hours trading. The stock has experienced a 52-week trading range between $48.33 and $108.40.

Roku, Earnings, Revenue