Roku shares surge 50% on first-ever Earnings beat

Roku Inc. (NASDAQ: ROKU) shares surged over 54 percent on Thursday shortly after open after reporting its first-ever earnings since its initial public offering launch on September 28. The streaming technology company beat analysts’ estimates in both revenue and earnings.

For the third quarter, Roku reported revenue of $124.78 million, increasing 40 percent year over year, and beating Thomson Reuters analysts’ estimates of $110.5 million. Roku reported an EPS of $-0.10, increasing from the same quarter last year of $-0.17, and beating Thomson Reuters analysts’ estimates of $1.37.

Revenue was strongly drive by platform revenue growth, which increased to $57.5 million, increasing 137 percent year over year. Roku says integrating advertisements, audience development, and content distribution grove the its platform segment.

Roku added DirecTV and Hulu Live onto its platform. The two media companies now joins the others on Roku’s platform such as YouTube, Netflix, Amazon Video, HBO, and many more.

Anthony Wood, CEO of Roku, said the advertising business more than doubled year over year from the featured media companies on its platform.

Wood said previously that the advertising business will be the primary growth driver for the company.

Active accounts increased 48 percent year over year to 16.7 million. The increase in active users caused a 37 percent in average revenue per user year over year reaching $12.68 for the third quarter, driven by the 58 percent increase in streaming hours.

For the fourth quarter, Roku is forecasting net revenue of $175 million to $190 million. The company is expecting total gross profits of $58 million to $64 million, but expecting a net income loss of $14 million to $8 million.

On Roku’s IPO launch, shares opened at $15.75 and closed at $23.50. After its first earnings, this represents the largest intraday surge in share prices Roku has seen since its IPO launch. Shares closed at $18.84 on Wednesday and surged up to $28.83 early morning on Thursday.

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