Roku, Inc. (NASDAQ: ROKU) announced its first quarter financial results after the market close on Wednesday. The streaming service company surpassed analysts’ estimates and provided a better-than-expected outlook, sending shares surging by 22.2% on Thursday morning.
For the first quarter, Roku reported earnings loss of USD 0.09 per share on revenue of USD 206.66 Million. FactSet analysts expected earnings loss of USD 0.24 per share on revenue of USD 190 Million.
Roku’s revenue rose by 51% year-over-year, while its platform revenue rose by 79% to USD 134.2 Million during the first quarter. Player revenue increased by 18% to USD 72.5 Million year-over-year. Despite the year-over-year growth, both platform and player revenue fell sequentially from USD 151.4 Million and USD 124.3 Million, respectively.
Roku’s stronger-than-expected quarter was driven by its active account and streaming hours growth. Active accounts grew by 40% to 29.1 million, while streaming hours skyrocketed by 74% to 8.9 hours for the quarter.
The increase in streaming hours caused Roku to see a 27% in its average revenue per user. Roku reported that ARPU rose from USD 15.07 the same period last year to USD 19.06 this past quarter.
Roku estimated that more than a third of smart TVs sold within the U.S. had Roku’s platform integrated. As a result, the Company was able to surpass Samsung for the first time as the top-selling smart TV operating system.
Moving forward, Roku remains optimistic despite the competition increasing within the streaming marketspace. The industry has seen major corporations enter such as Amazon (NASDAQ: AMZN) and Disney (NYSE: DIS). Additionally, companies such as Apple (NASDAQ: AAPL) are beginning to kickstart to their platforms.
“These big commitments from players like Disney are further proof of the importance of over-the-top going forward,” Chief Financial Officer Steve Louden told MarketWatch. “When they win, we win in terms of economics.”
For the second quarter, Roku expects revenue between USD 220 Million and USD 225 Million. And as for the full year, the Company projects revenue in the range of USD 1.03 Billion to USD 1.05 Billion. Analysts are expecting second quarter revenue of USD 190 Million.
“Roku continues to execute well in a rapidly evolving marketplace that offers new opportunities to fuel our growth. As leading content companies continue to shift their focus to streaming, Roku’s purpose-built TV streaming OS is uniquely positioned to help them build, engage, retain and monetize OTT audiences. Our large and rapidly growing audience, rich proprietary data and powerful OS allow us to deliver more effective, targeted and measurable viewing and advertising along with unduplicated incremental reach. We are excited to bring the benefits of streaming to millions of customers today and many millions more in the years ahead.” said Anthony Wood, Roku Founder and Chief Executive Officer and Steve Louden, Roku Chief Financial Officer.