Roku Kills It In Q1, With Revenue Up 55%; Streaming Hours Rise 80% In April, Accounts Near 40M

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Roku delivered strong results in the first quarter, with the onset of COVID-19 propelling an 80% rise in total streaming hours in April as linear TV viewing in younger demos showed declines.

Total revenue rose 55% from the year-earlier quarter to reach $320.8 million, ahead of Wall Street analysts’ estimates. The company’s loss per share widened to 45 cents from 9 cents a year ago.

Following through on an announcement from Roku earlier this spring, the company ended the quarter on March 31 with 39.8 million accounts.

In a letter to shareholders, founder and CEO Anthony Wood and Steve Louden said active accounts grew roughly 38% in the quarter, with net new accounts up 70%. Citing Nielsen, they said prime-time linear viewing among adults aged 18-34 fell 18% between March 16 to April 19, and nearly half of all TV viewing by that demo was streamed.

Some headwinds were cited in the shareholder letter. Sales of Roku devices and smart TVs using the company’s licensed interface have been “very healthy” in 2020 to date, the company said, but disruptions to the supply chain and retail channels both became factors.

“We anticipate that our ad business will deliver substantial revenue growth on a year-over-year basis, albeit at a slower pace and lower gross profit than we originally expected for the year,” execs wrote in the letter. Over the longer-term, though, they said Roku is poised to take advantage of ongoing cord-cutting and the need of advertisers to employ more targeted messages.

Investors spooked by the ad outlook sent shares in Roku down 8% in after-hours trading, erasing gains during the regular session, which they ended at $137.50, near a three-month high.

Ad-supported streaming outpaced overall platform growth in the quarter, the company said. Subscription services offered via the Roku Channel saw a surge in signups, with many customers enticed by more than 25 extended free trials extended during COVID-19 shutdowns.

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