Roku Q1 revenue up 19% YoY
April 26, 2024
Roku, the streaming specialist, has reported that Q1 platform revenue stood at $755 million (€703m), up 19 per cent YoY. Gross profit was at $388 million, up 15 per cent.
Streaming households hit 81.6 million, a net increase of 1.6 million from Q4 2023. Streaming hours were at 30.8 billion, up 5.7 billion hours YoY. Average Revenue Per User (ARPU) was $40.65 on a trailing 12-month basis, which was flat YoY.
In a letter to shareholders the company said: “We delivered solid results in Q1, growing Streaming Households (previously ‘Active Accounts’) 14 per cent YoY, streaming hours 23 per cent YoY, and platform revenue 19 per cent YoY. Roku remains the #1 selling TV OS in the US and Mexico, and we continue to expand our retail distribution. The Roku Channel’s ongoing growth made it the #3 app on our platform by both reach and engagement. This strong performance demonstrates the impact of surfacing relevant content throughout our platform. We also achieved positive Adjusted EBITDA and Free Cash Flow for the third consecutive quarter, demonstrating our ongoing focus on operational efficiencies”.
“Roku continued to benefit from consumers’ focus on value. The Roku operating system (OS) was again the #1 selling TV OS in the US and Mexico, representing approximately 40 per cent of TVs sold in each country in Q1,” the letter added.
Advertising Activities
The company reported that YoY growth of video advertising across the Roku platform outperformed both the overall ad market and the traditional linear TV ad market in the US. The Consumer Packaged Goods, Retail, and Auto verticals grew, while Insurance remained challenged.
Home Screen and video ads on the Roku platform reached US households with nearly 120 million people on a daily basis in Q1. Roku recently developed a new, virtual showroom that allows viewers to explore product options on the Roku platform. Advertisers can drive viewers to the showroom via ads on the Home Screen. These products help advertisers achieve results from top-of- funnel broad reach awareness to bottom-of-funnel results.
Roku added that it is making it easier for advertisers to execute campaigns programmatically by expanding and deepening its relationships with third-party platforms, including retail media networks, DSPs (demand side platforms), and other strategic partners. In Q1, the company continued to grow programmatic ad spend as a percentage of total video ad spend on the Roku platform. Roku said it is focused on growing both the number of advertisers it serves and the size of advertising budget, while building partnerships that expand the targeting, attribution, and measurement capabilities it offers.
Outlook
Looking ahead, Anthony Wood, Founder and CEO, and Dan Jedda, CFO, said: “We are pleased with our Q1 results, particularly the third consecutive quarter of positive Adjusted EBITDA and Free Cash Flow. We believe this demonstrates our operating discipline and leverage. Looking ahead, we face difficult year-over-year growth rate comparisons within streaming service distribution activities. This headwind is due to past price increases and a higher mix shift toward ad-supported offerings. In Q2, we estimate Total net revenue of $935 million, Total gross profit of $410 million, and Adjusted EBITDA of $30 million. Looking into the second half of the year, we anticipate normal seasonal spend in Sales & Marketing for Devices, which will cause Adjusted EBITDA to slightly moderate relative to the first half of the year.”
“We remain confident in our ability to accelerate the growth of Platform revenue and continue to grow Adjusted EBITDA, and Free Cash Flow in 2025 and beyond. We are focused on expanding monetisation of the Roku Home Screen, bolstering programmatic ad capabilities, and growing Roku-billed subscriptions. Advertisers seeking to maximise ROI need ad solutions with significant reach and innovative ad technology. Roku has a direct relationship with more than 81 million Streaming Households, and we are deepening relationships with third-party platforms including DSPs, retail media networks, and measurement partners. Our business remains well positioned to capture the billions of dollars in traditional TV ad budgets that will shift to streaming,” the pair added.