Streaming video platform Roku late Thursday beat expectations for new users and sales in the fourth quarter. It also guided higher than views for the current quarter. But Roku stock fell in extended trading.
The San Jose, Calif.-based company added 4.2 million new accounts, ending the period with 80 million active accounts. Analysts had expected 3.05 million new accounts in the fourth quarter.
Roku lost 55 cents a share on sales of $984.4 million in the December quarter. Wall Street had expected Roku to lose 55 cents a share on sales of $968 million. In the year-earlier quarter, Roku lost $1.70 a share on sales of $867 million.
The magnitude of Roku's sales outperformance last quarter was lower than many analysts had hoped for, Evercore ISI analyst Shweta Khajuria said in a note to clients.
Also, Roku's average revenue per user dropped 4% year over year to $39.92. Roku said the decline was due to the addition of more users in international markets such as Mexico and Brazil.
Roku Stock Falls After Report
For the current quarter, Roku predicted revenue of $850 million, surpassing the consensus estimate of $829 million. In the same quarter last year, Roku generated sales of $741 million.
In after-hours trading on the stock market today, Roku stock dropped more than 13% to 81.68. During the regular session Thursday, Roku stock rose 3.6% to close at 94.50.
In a shareholder letter, Chief Executive Anthony Wood and Chief Financial Officer Dan Jedda noted that the company achieved positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and free cash flow for 2023, a year ahead of schedule.
"From this position of improved operational efficiency, we are focusing more of our management attention in 2024 on innovation and growth," they said. "There are more opportunities to help our viewers find content across the streaming universe, in ways that are engaging and entertaining, while also driving monetization."
Roku stock has been consolidating for the past 10 weeks with a buy point of 108.84, according to IBD MarketSmith charts.
On Tuesday, Roku stock tumbled nearly 9% on a news report that said Walmart is looking to buy smart TV maker Vizio. Vizio competes with Roku in selling televisions and advertising on its streaming video platform.
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