Roku Passes 39 Million Accounts, Tops Q1 Revenue Estimates
Like Netflix, Roku looks to have benefited from widespread stay-at-home orders, with the streaming device company adding nearly 3 million active accounts and topping Wall Street’s sales estimates when it reported its Q1 earnings on Thursday.
For the first quarter, Roku reported sales of $321 million, marking an increase of 55% year-over-year and topping analyst estimates of $307 million in revenue. Although the company is best known for its myriad of streaming devices, advertising continues to account for most of sales, with more than 72% of its Q1 revenue coming from its ad business.
Roku had already shared some Q1 highlights before Tuesday, with the company last month saying customers had watched 13.2 billion hours of content during Q1 — up 49% year-over-year. The company also reported 2.9 million new active accounts, putting it on the verge of hitting 40 million accounts overall. On average, Roku’s active members watched 3.75 hours of content per day during Q1.
Roku’s shares, which had been on a big run in the last week, dropped 3.7% in after-hours trading to $132.40 per share.
The company, in its letter to shareholders, said active accounts and viewing continued to surge in April due to coronavirus-related quarantining.
“The pandemic associated stay-at-home orders and increased unemployment appear to have accelerated the shift from linear TV viewing to streaming during the past few weeks,” Roku said.
One concern for analysts and investors heading into Roku’s Q1 report was seeing how badly hit its ad business was by the overall advertising downturn. Since mid-March, Roku said it’s seen a “mixture of impacts” related to the slumping ad market.
“While our advertising business has seen higher than normal cancellations as overall advertising budgets have declined, this has been partially offset by ad-spend that has moved to Roku from traditional TV budgets,” Roku said.
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