Streaming platform company Roku Inc (NASDAQ:ROKU) reported third-quarter financial results after the market close Wednesday. Here are the key highlights.
What Happened: Roku reported third-quarter revenue of $761.4 million, up 12% year-over-year. The total beat a Street estimate of $702.3 million, according to data from Benzinga Pro.
Platform revenue in the third quarter was $670.4 million, up 15% year-over-year. The company said this was lower than its historical growth but also noted it might be a positive in the “difficult macro environment.”
Player revenue was $91 million in the third quarter, down 7% year-over-year.
The company added 2.3 million active accounts in the third quarter. Roku ended the third quarter with 65.4 million active accounts worldwide.
Total streaming hours were 21.9 billion hours in the third quarter, up 1.1 billion from the second quarter.
Streaming hours for The Roku Channel were up 90% year-over-year in the third quarter. The channel was a top five channel by active accounts and streaming hour engagement for the third consecutive quarter on Roku platforms.
The company said advertising spending is growing more slowly than earlier in the fiscal year.
Roku has an average revenue per user of $44.25 on a trailing 12-month basis, up 10% year-over-year.
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What’s Next: Roku sees fourth-quarter revenue of $800 million, shy of a current Street estimate of $895.2 million, according to data from Benzinga Pro.
“We expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market,” the company said.
Roku sees this being a temporary issue but said it’s hard to predict when it will rebound.
“We believe the strong growth in the scale and engagement of our platform, combined with the continued consumer shift to TV streaming, positions us well for when the ad market improves.”
The company highlighted a continued focus on scaling to markets outside the U.S., with The Roku Channel recently launched in Mexico among the highlights.
Roku also plans to grow and diversify with the launch of new smart home products that were announced last month. Roku will offer cameras and video doorbells that come with subscription plans and could add recurring revenue to the company.
Smart home products are available through an exclusive partnership with Walmart (NYSE:WMT).
“We believe every device in the home will be smart, but it is still early days as approximately 20% of U.S. households have cameras. We are well-positioned to be the leading smart home platform as we have strong brand affinity and deliver seamless experiences at consumer-friendly price points.”
ROKU Price Action: Roku shares are down 17% to $45.01 in after hours trading Wednesday versus a 52-week range of $47.27 to $314.70.
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