Roku has reported 46% more active accounts and a 57% increase in streaming hours compared to last year as revenue and profit exceeded expectations.
Reporting its second quarter results atthe end of June, Roku stated that they had 22.0 million active accounts, with users streaming 5.5 billion hours in the quarter. This is the fastest growth that has come from Roku TV’s, where streaming hours have more than doubled year-on-year.
In terms of financials, the company experienced its fastest revenue growth rate since 2013, up 57% year-on-year to US$156.8 million. Platform revenue exceeded player revenue at 58% of total revenue, compared to 46% a year ago.
It wasn’t just revenue growth the company had, their gross profit was up 107% to US$77.8 million, including accruals of US$8.9 million related to potential IP licensing liabilities that did not materialise. Adjusted EBITDA of US$7.1 million and net income of US$0.5 million came in “well ahead” of the outlook Roku provided in May. The company’s share price increased by 21% yesterday after the results were posted.
“Our key operating metrics continued to mirror the very solid growth we have seen in recent periods,” said Roku CEO Anthony Wood and CFO Steve Louden in their letter to shareholders.
“We are in the early stages of the transition to streaming. We believe one day all TV content will be streamed. We build scale by licensing our platform to TV manufacturers and service providers, and by selling our popular line of streaming players.”
“On the monetisation front, increasing engagement with our platform and continued shift to ad-supported content is creating new ways to drive Platform revenue and ARPU growth, with ARPU reaching a new high in Q2 of US$16.60, up 48% year-over-year.”
Roku’s average revenue per user (ARPU) has doubled in the past two years, with advertising thought to have been the main reason for this. Roku’s TV ad platform uses proprietary data and technology to target viewers, with the company claiming its OTT ads are more efficient for advertisers and offer a better experience for viewers compared to traditional linear TV ads.
“TV advertisers are shifting budgets to OTT. Over time we believe the vast majority of the US$70 billion annual US TV advertising market will shift to streaming. This is a key long-term driver of Roku ad sales revenue growth which more than doubled year-over-year in Q2,” said Wood and Louden.
Separately, Roku announced that it is launching The Roku Channel for the web in the US, giving free access to content at TheRokuChannel.com once viewers log-in or create a Roku account. The Roku Channel launched on Roku last year and is the platform’s fifth most popular channel currently.
From this week, Roku also started to roll out a navigation change to the Roku home screen called ‘Featured Free,’ which provides users with direct links to free content from the likes of ABC, The CW, FOX, Freeform, Pluto TV, Sony Crackle, Tubi and The Roku Channel.
“We want to be the best destination for free streaming entertainment,” said Rob Holmes, Roku’s vice president of programming and engagement. “We’re delighted to deliver even more value to our customers without subscriptions, complicated logins or fees.
Source: Digital TV Europe
