Roku reported a strong Q2 2023 beating analysts estimates on multiple fronts, also adding more active users and streaming hours.
Popular video streaming platform Roku (NASDAQ: ROKU) reported earnings for Q2 2023, showing figures that surpassed analyst estimates for new users and revenue.
Roku revenue climbed 11% to $847.2 million, well above the $774.5 million predicted by analysts polled by FactSet. Also, the company lost 76 cents a share, lower than analysts’ expected $1.26. Q2’s loss is also lower than the 82 cents a share lost in Q2 of 2022.
Roku now has over 73 million active accounts, more than 16% higher than the 63.1 million recorded a year ago. Although streaming hours remained stagnant quarter over quarter, the company reported 25.1 billion, an increase from 20.7 billion for the same period last year. Device sales climbed 9% to $103.4 million.
Roku chief executive officer Anthony Wood and CFO Dan Jedda in a note to shareholders said the general TV advertising market has been slow, stating that it “remains muted industrywide.” However, the note informs that Roku ads are recovering, and assures that the company is ready to grow with the ad market correction.
“We have begun to see some ad verticals improve, which resulted in modest YoY platform revenue growth in Q2, and we are well positioned to re-accelerate growth as the ad market recovers.”
Roku predicts that its revenue for Q3 would hit $815 million, with a total gross profit of $255 million.
The company’s stock fell 4.59% on the day and closed at $68.19. However, as of writing time, ROKU has recovered the loss and climbed 8.51% to $73.99 in after-hours trading.
Roku in Q1
In the first quarter of 2023, Roku’s total net revenue climbed 1% year over year (YoY) to $741 million, while platform revenue fell 1% YoY to $635 million. Gross profit fell 7% YoY to $338 million, with the platform’s average revenue per user (ARPU) falling 5% YoY to $40.67. Also, the company’s total operating expenses rose 42% YoY to 550.1 million from $388.3 million the year before.
Roku Partnered with Shopify and Launched New TV in Q2 2023
Last month, Roku announced a partnership with Canadian multinational e-commerce giant Shopify (NYSE: SHOP) to make shopping easier for customers. Roku integrated Shopify with the Action Ad service so that viewers can use their TV remotes to select an ad using their TV. When users see an ad for a product they may want, they can press OK for information about the product and eventually make payments using Roku Pay. At the time of the announcement, Roku stock jumped 11%.
Roku also recently launched the new 55-inch Polaroid Roku TV in the UK. Combining the Polaroid TV hardware with the streaming company’s OS, the new TV has a traditional setup for terrestrial functions, as well as access to most streaming services. Users can also push content from their phones as the TV has seamless iOS compatibility. The TV supports Dolby Audio and Dolby Vision, along with HDMI 2.0 for flexible connectivity.