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Roku Inc. shares moved 2% higher in Wednesday’s after-hours action as the streaming-media company cited continued ad-market pressures but topped expectations for its latest quarter.
The company reported a first-quarter net loss of $193.6 million, or $1.38 a share, compared with a loss of $26.3 million, or 19 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting a $1.47 loss per share.
Roku…
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Shares of Roku Inc.
ROKU,
rallied 2.7% in premarket trading Thursday, after the streaming-media company disclosed that it would lay off 200 employees, or about 6% of its workforce as part of a cost-cutting plan. The plan will also include the exit and sublease, or cease the use of, certain office facilities. The company expects to record charges of $30 million to $35 million as a result of the plan, which will include severance payments, notice pay and employee benefit contributions. Most of the charges will be recorded in the fiscal first quarter, and the job cuts will be “substantially complete” by the end of the second quarter. The stock has soared 57.0% over the past three months but has tumbled 50.8% over the past 12 months, while the S&P 500
SPX,
has lost 12.5% over the past year.
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Streaming platform Roku Inc.
ROKU,
on Friday said it “does not know” to what extent it would be able to recover the cash it has deposited with the recently-failed Silicon Valley Bank. Roku said it had cash and cash equivalents of around $1.9 billion as of Friday, with around $487 million — or roughly 26% — at the bank. Roku said its deposits with SVB were “largely uninsured.” Shares fell 3.7% after hours.
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Roku Inc. shares plummeted 19% in after-hours trading Wednesday after the streaming company topped expectations with its latest results but gave a weaker-than-anticipated outlook for the holiday quarter as economic conditions could further “degrade advertising budgets.”
For the fourth quarter, Roku executives anticipate $800 million in revenue and a loss of $135 million on the basis of adjusted Ebitda. The FactSet consensus called for $899 million in revenue as well as a $48 million adjusted Ebitda loss.
“As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market,” the company said in its shareholder letter. “We expect these conditions to be temporary, but it is difficult to predict when they will stabilize or rebound.”
Chief Financial Officer Steve Louden shared on a call with reporters following the release that the company’s forecast “reflects the fact that we see a lot of challenges in the macro environment.”
He explained that Roku tends to be more exposed to the scatter ad market — which represents ads bought during the quarter — than the typical TV network. Scatter spending is easy for marketers to turn on, but also easier for them to turn off, he noted.
The forecast overshadowed the results from Roku’s third quarter, which were broadly better than expected.
The company posted a net loss of $122.2 million, or 88 cents a share, whereas it logged net income of $68.9 million, or 48 a share, in the year-earlier period. Analysts tracked by FactSet were expecting a $1.29 loss on a per-share basis.
Roku also reported a loss of $34 million on the basis of adjusted earnings before interest, taxes, depreciation and amortization. The company had posted positive adjusted Ebitda of $130 million in the year-before quarter. The FactSet consensus was for a $74 million loss on the non-GAAP metric.
Revenue rose to $761 million from $680 million, while analysts were anticipating $696 million.
The company generated $670 million in platform revenue and $91 million in player revenue. Analysts were expecting platform revenue of $613 million and player revenue of $87 million.
Roku had 65.4 million active accounts in the latest quarter, up from 63.1 million in the second quarter. Average revenue per user was $44.25 on a trailing-12-month basis, compared with $44.10 in the second quarter and $40.10 in the prior year’s third quarter.
Analysts were anticipating 64 million active accounts and $43.40 in average revenue per user.
Louden noted on the media call that the account numbers “outperformed expectations.” The company has seen “strong sales of smart TVs both in the U.S. and internationally,” with Louden adding that “it’s hard to tell how much is driven by a shift back to home or back to streaming, which is a very good value proposition if money is tight.”
Viewers spent 21.9 billion hours streaming content through Roku’s platform in the period. The FactSet consensus was for 20.9 billion hours streamed.
As companies like Netflix Inc.
NFLX,
and Walt Disney Co.
DIS,
explore ad-supported streaming more deeply, Louden sees opportunity for Roku to be of further value.
“That changes their focus a bit from only thinking about subscribers to thinking about engagement” and he sees Roku’s team members as “experts in understanding how consumers look at that.”
The company also noted in its shareholder letter that CFO Louden intends to leave Roku at some point in 2023 after helping to recruit and train his successor.
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