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Roku “pleased with resilience” in FY results

February 19, 2021

Roku, the US streaming specialist, has released fourth quarter and fiscal year 2020 results that beat analyst’s expectations.

In a conference call, Roku CEO and founder Anthony Wood said: “In Q4, we grew our active account base by over 5 million resulting in a record 14.3 million incremental active accounts for the year. And we ended 2020 with 51.2 million active accounts. Our scale has extended rapidly over the last several years. And to put it in perspective, Roku’s US active account base is more than twice the size of the video subscribers of the largest cable company in the US.”

“In addition to increasing our scale, we continue to see growing engagement with our platform, with 2020 streaming hours up 20.9 billion year-over-year to a record 58.7 billion hours. In Q4, we grew streaming hours 55 per cent year-over-year, consistent with the year-over-year growth rate for the full-year. Furthermore, we grew average streaming hours per active account, 10 per cent year-over-year in Q4, demonstrating the strong engagement of our user base.”

“[…] In Q4, total revenue increased 58 per cent year-over-year to $649.9 million. Platform segment revenue was up 81 per cent year-over-year to a record $471.2 million, driven by strong advertising demand. Q4 player revenue growth of 18 per cent year-over-year was slightly lower than the growth rate in Q4 2019, as Covid restrictions and economic uncertainty muted holiday store traffic and consumer demands.”

“Our key financial performance metric is gross profit, which grew a vigorous 89 per cent year-over-year in Q4, to a record $305.5 million. Gross margin in the quarter was 47 per cent, fairly consistent sequentially as improvements in platform margin largely offset the seasonally lower player margins, based on our holiday promotions. Q4 adjusted EBITDA of $113.5 million produced the vast majority of our record $150 million of adjusted EBITDA for the year, and was the result of a confluence of strong performance. Robust revenue growth, strong gross profit leverage as we continue to move into higher margin platform business and leverage on OpEx growth in part due to our decision to be more conservative on account growth in 2020.”

“We are pleased with our 2020 results and the resilience of our business, and are optimistic about the year ahead. We believe we have sufficient visibility in the short-term to provide formal outlook for Q1. However, as we look farther ahead, the level of uncertainty compounds when trying to assess the net impact of a variety of factors such as the timing of the vaccine rollouts, emergence of new Covid-19 variants as well as the lasting economic impacts of the pandemic. Consequently, instead of providing a formal outlook for the full year, we will provide some directional perspective.”

Wood also noted a difficult comparison to last year’s results, adding: “We are mindful that in 2021 year-over-year comparisons will be quite volatile. In the first half of the year, we expect strong financial comparisons as compared to the first half of 2020 which includes early impacts from Covid-19 and the resulting economic lockdown. While in the second half of the year, we anticipate much tougher comparisons thanks to our exceptional performance in H2 2020, and Q3 in particular, as consumer interest in streaming surged and our monetization efforts rebounded from slower Q2 growth levels.”

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