Roku shares roared to life after hours Wednesday after the streaming specialist reported better-than-expected results for the fourth quarter.
The company reported total revenue of $867.1 million in the period ending December 31, which was flat with the year-earlier period but well ahead of Wall Street analysts’ forecast of $801.7 million. Another upbeat sign for investors was Roku’s forecast for $700 million in revenue during the first quarter, almost $10 million higher than Wall Street’s current consensus.
Shares in Roku, which have taken a beating over the past year-plus, rose 12% during the regular trading day, finishing at $63.49, and jumped another 12% after the bell on the strong print. The stock had been among the worst-performing of 2022, plunging 80% on fears about softening advertising and overspending on original content.
Roku also said it ended 2022 with 70 million active accounts, up more than 10 million over 2021. Total streaming hours jumped 23% in the quarter, reaching 23.9 billion.
Losses continued at Roku, with negative EBITDA of $95.2 million in the quarter, compared with positive EBITDA of $86.7 million in the year-earlier period. On an operating basis, losses widened to $249.9 million from a profit of $21.4 million a year ago. Despite all of the red ink, the company still managed to clear the Wall Street bar on the bottom line, with earnings per share of -$1.70 slipped past analysts’ expectation for -$1.73.
Tech companies of all stripes have encountered stiff economic challenges in recent months due to inflation, supply-chain issues and other factors. Advertisers have pulled back across the board, which has hurt results at giants like Google and Facebook as well as smaller players. In its quarterly letter to shareholders, Roku said it experienced some of the pressures others did in the holiday period, normally a sweet spot for most consumer businesses.
“While the holiday season is typically the strongest period for most consumer businesses, as expected, this past Q4 was different,” the letter said. “Macro uncertainties and inflationary pressures negatively affected the consumer electronics category. However, in Q4 overall, U.S. smart TV unit sales were better than expected, benefiting from lower TV panel prices and freight costs. Unit sales of Roku TV models in the U.S. outperformed the overall market due to consumers’ focus on value. International Roku TV unit sales also benefited from this same Q4 trend.”
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