Shares in Roku rose in after-hours trading, following an upswing during the main Thursday session, after the company released third-quarter results well above Wall Street expectations.
Revenue jumped 73% from the year-ago period and profit reached 9 cents a diluted share, compared with a loss of 22 cents a share a year ago. The consensus forecast from analysts called for a loss of 4 cents.
Roku, which has become a central player in the streaming boom, now has 46 million active accounts. That’s up from 43 million in the second quarter and 32.3 million at the same point in 2019.
As COVID-19 continued to alter the viewing landscape, total streaming hours via Roku reached 14.8 billion, up 200 million from the previous quarter and 54% from the 2019 quarter.
Netflix Ties Emmy Record With 44 Wins In Single Year, Capped By One-Two Series Punch
The company’s stock, which reached an all-time high of $239.14 last month, closed Thursday’s trading at $225.06 and was up 3% during the first hour after the close. It has risen more than 60% in 2020 to date.
Watch on Deadline
In its quarterly letter to shareholders, the company said it benefited from a choppy period in the linear TV business, where advertising spending and viewing has been disrupted by the coronavirus pandemic. Viewing of linear TV also has declined some 17% in the 18-49 demo, which is bad news for traditional advertising. “When released from their annual TV upfront commitments, marketers took the opportunity to reallocate advertising spend more aggressively toward TV streaming,” the letter said.
After beginning as a hardware-focused company, Roku has been shifting toward licensing and advertising in recent years. Its ad operation has been gaining traction, appearing in the NewFronts in June for the first time. In its shareholder letter, it said 97% of TV advertisers spending $1 million or more with Roku in the same quarter of 2019 continued to invest in the current-year period. The company said it has closed 2021 upfront deals with all six major agency holding companies “at significantly increased levels of commitments.”
While ad revenue is not broken out as its own category, “platform revenue” increased 78% to $319.2 million. The number of “monetized video ad impressions” — a description reflecting the various ways that advertising works in Roku’s ecosystem — shot up 90% in the quarter, compared with a 50% increase in the second quarter.
The Roku Channel, the company’s ad-supported offering, doubled its reach compared to a year ago, getting to households with an estimated 54 million people.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.