Roku beats forecasts

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Roku beat Wall Street expectations for the fourth quarter in a row since IPO. The firm also lifted its guidance for the year, as it capitalises on the shift of eyeballs and ad dollars from traditional broadcasting to online videos.

Roku reported a net income of just $0.5m compared with a $15.5m net loss a year earlier with a sustained increase in higher-margin advertising revenues, as well as a one-off benefit from intellectual property licensing liabilities that Roku ended up not having to pay.

This is the second quarter that Roku’s “platform” sales, primarily made up of advertising on its channel and programme guide, outstripped revenue from its devices. Platform revenues almost doubled to $90.3m, with player revenues up by a quarter to $66.5m, lifting overall revenues by 57 per cent to $156.8m — about $15m better than analysts had expected and its fastest growth rate for almost four years. “Our platform business has very strong growth rates. That trend will continue,” said Roku chief executive Anthony Wood.

Roku is increasing the number of people using its streaming dongles, as well as software preloaded into TV sets, up 46 per cent to 22m. But the amount of content each of them is watching is growing faster, up 57 per cent to 5.5bn hours in the quarter. That means it can sell more advertising, mainly video ads in its free-to-view channels. Roku said it now expects full-year revenues of $710-730m. Most analysts had been expecting less than $700m for 2018 sales.


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